Tullow Oil Plc, in conjunction with its Joint Venture Partners, has revealed plans to halt drilling activities in Ghana later this year, with the intention to resume operations in 2025.
This strategic decision comes amidst sustained production from existing wells at the Jubilee and TEN fields, signaling a move towards resource optimization and maximizing the productivity of current assets.
In a recent statement released ahead of the Group’s 2023 full-year results, scheduled for announcement on March 6, 2024, Tullow Oil highlighted significant milestones in its drilling program. Notably, the company expects five Jubilee wells, consisting of three producers and two water injectors, to commence production in 2024.
This achievement not only demonstrates exceptional drilling performance but also signifies the completion of planned activities, delivering results approximately six months ahead of schedule.
While the pause in drilling activity is set for 2024, Tullow Oil Plc and its partners remain optimistic about the future. Plans are already underway to initiate the procurement process for a new rig in the same year, underscoring the company’s commitment to sustaining and enhancing its operations in the Ghanaian oil sector.
This forward-looking approach reflects Tullow Oil’s confidence in the long-term potential of its assets and its dedication to maintaining operational excellence.
Commenting on the company’s performance for 2023 and its outlook, Rahul Dhir, Chief Executive Officer of Tullow, expressed satisfaction with the progress made, stating, “Continued delivery of our business plan in 2023 resulted in a major inflection point as we moved from a period of investment focus to delivery of free cash flow growth.”
Trajectory Towards Generating Substantial Free Cash Flow
Dhir further highlighted the company’s trajectory towards generating substantial free cash flow, targeting approximately $600 million over the next two years and aiming for a total of around $800 million from 2023 to 2025, assuming an oil price of $80 per barrel.
Moreover, Tullow Oil’s recent debt facility agreement with Glencore underscores confidence in its business plan, providing a solid financial foundation with no significant uncovered debt maturities until May 2026. Dhir emphasized the company’s commitment to maintaining capital discipline while driving production growth from its assets.
Amidst the pause in drilling operations, Tullow Oil remains cognizant of the broader context of the energy transition and the evolving demands for cleaner and more sustainable energy sources. The company continues to prioritize environmental stewardship and community engagement, working collaboratively with stakeholders to ensure responsible exploration and production practices.
By integrating sustainability principles into its operations and exploring renewable energy opportunities, Tullow Oil aims to align its business objectives with the global imperative for a more sustainable energy future.
As Tullow Oil prepares to temporarily halt drilling operations in Ghana later this year, the focus remains on prudent resource management, operational efficiency, and long-term value creation. With plans for resumption in 2025 and continued investment in infrastructure, the company stands tall and ready to go through challenges and capitalize on opportunities in the energy sector.
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