Updating its portfolio performance for half-year 2022, ahead of the scheduled date in September 2022, Tullow’s unaudited results show that the company is on track to deliver or exceed full year guidance of its operations.

The company, in a brief, noted that “our current business plan is underpinned by assets that yield a deep portfolio of compelling investment opportunities,” and further highlighted ongoing projects that indicate additional opportunities that provide material value.

In a press release, the company acknowledged that “it has performed well in the first half of the year and has built on the progress that the Group made in 2021”. Production in the first half of the year was in line with expectations and drilling performance across the portfolio remained strong.

Rahul Dhir, Chief Executive Director, Tullow Oil Plc, said:

“It is two years since I joined Tullow and today, we are in a very different place. A relentless focus on costs, capital discipline and operating performance is ensuring delivery of our business plan. We have also added unhedged production through the pre-emption in Ghana.”
Rahul Dhir

Projects Provide Material Value

Among the projects that have proven potential to provide material value to the company’s portfolio are the work on the TEN Enhancement Plan, which has identified significant upside to the current 2025 gross production target of 50 kbopd.

In addition, Ghana’s gas demand is expected to continue growing strongly, supporting economic development and growth of industry. According to Tullow, the quantum of gas recources identified is approximately 2 Trillion Cubic Feet (TCF) in Jubilee and TEN.

With this huge resource, there is the potential to provide energy security for Ghana, while reducing dependence on the highly competitive global LNG market. Tullow said it is preparing an integrated plan for the rapid development of this material resource.

“Each of these projects has the potential to deliver material returns on capital and further enhance our production and cash flow generation. The proposed merger with Capricorn is an important enabler for a new business plan of the combined group, leveraging the combined resources of both companies and underpinned in part by the accelerated implementation of these projects.”
Rahul Dhir

With a new business plan, pre-tax cost synergies of $50 million per year, the opportunity to drive down cost of capital and further optimise capital allocation, the combined group will be well positioned to play a leading role in the African energy sector, delivering material value for all shareholders and our host nations.

“We are preparing a circular and prospectus for shareholders in connection with the proposed merger with Capricorn which we expect will be available in the fourth quarter ahead of a shareholder vote on this proposed merger expected towards the end of the year.”
Rahul Dhir

Tullow’s Drilling Programme

In other developments such as the ongoing drilling programme that started in April 2021, Tullow noted it has since delivered seven new wells, six at Jubilee and one at TEN, at an average cost of less than $50 million per well. This is more than 10% below the average expected cost for these wells. In addition, two existing wells have been completed, one at Jubilee (J12-WI) and one at TEN (En16-WI).

The Jubilee field also yielded production value of 82.4 kbopd gross (30.8 kbopd net) in the first half of the year, in line with expectations. This year, two new water injection wells and one new producer well have been drilled and brought onstream in the Jubilee field, helping to offset natural decline.

The current pace of drilling in Ghana is expected to result in an acceleration of the next phase of drilling at Jubilee into the fourth quarter of 2022. These wells will be tied into the Jubilee South East infrastructure in 2023, Tullow said.

“Our current business plan is underpinned by assets that yield a deep portfolio of compelling investment opportunities. A continuing and comprehensive review of our resource base has identified additional opportunities to unlock material value.”
Rahul Dhir