Tullow Oil plc. has met its financial goals for the first half of the year and focuses further on its operations in Ghana as it reconsiders its plans for Kenya’s operations.
Achieving good operational progress in Ghana, Tullow highlighted that its oil fields performed well beyond expectations. Tullow’s Jubilee and TEN fields made a combined working interest production of 42.5 kboepd. Tullow’s group working interest totaled 61,230 boepd in the first half of 2021.
According to the Company’s Chief Executive Officer (CEO), Rahul Dhir, he indicated that Tullow achieved “strong operational performance” in the first half of the year.
“The 2021 drilling programme continues and the first well of the programme, the J-56 producer, came onstream in July 2021 delivering rates ahead of expectations…” adding that the TEN drilling programme was within expectations.
Tullow reported revenue of US$727 million for the first half of the year, with a post-tax profit of US$93 million. Also, the company’s underlying operating cash flow was US$218 million and a free cash flow of US$86 million.
Moreover, administrative expenses declined by half (50%) during the period under review which was US$23 million at the first half of 2021. Also, capital investments amounted to US$101 million in the first half of the year.
Furthermore, the company’s net debt as at the end of the first half had slashed to US$2.3 billion, which was possible through a number of refinancing strategies including US$1.8 billion bond sale, some asset sales, and a US$500 million revolving credit facility.
Based on Tullow’s full year expectations, free cash flow is expected to reach US$0.1 billion in the second half of the year (where oil price averages 70/bbl). While the group working interest production has been narrowed upwards to 58,000-61,000 boepd.
Scaling up oil production in Kenya field
With respect to its Kenya oil field development, Dhir commented: “The revised development plan creates a robust project that has the potential to deliver material value to the Government of Kenya and other stakeholders.”
Additionally, the companies that work on the South Lokichar project in Kenya are now seeking a strategic partner to develop this resource. According to Tullow, the plan would be to secure a partner ahead of a final investment decision (FID).
The company has hatched a new plan for a higher production plateau of the Kenya field to 120,000 bopd, with expected gross oil recovery of 585 million barrel of oil over the full life of the field.
The development concept for the Kenya field incorporates the production data from the Early Oil Pilot scheme (EOPS) which produced 450, 000 bbls from the Amosing and Ngamia fields.
Other changes to the plan include additions of the Ekales field to the first phase. This will now cover four fields: Ngamia, Ekales, Amosing and Twiga (NEAT), providing 390 million barrels of the total 585 million.
The facility design capacity will make up 130, 000 bpd, while the pipeline size will rise to 20 inches, above the previous 18 inches for the purpose of handling increased flow rates.
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