Shares drop for Tullow despite outlook
In it the group said the current “unprecedented’ strength in oil and gas prices has put the company in a position to significantly enhancing shareholder value.
Tom Hickey, the chief financial officer of the group said Tullow was benefiting from the high oil prices and the first half “should be significantly ahead of this time last year”.
The group reported operating profit of £189m (€237.9m) sales of £639m (€804.6m) for the year ended 31 December 2007.
In its statement, the Dublin and London listed company said that it has performed “exceptionally well’ over the first half of 2008.
It added that it had enjoyed a solid production performance with outstanding appraisal results in Ghana and continued exploration potential in Uganda.
Capital spending in the first half was £170m, while planned expenditure for the full year is forecast to be £480m.
The company said that production for the first half of 2008 average 70,500 barrels of oil per day (boepd), up 1% on the previous year.
Sales for the first six months averaged 60,000 boepd, it said.
During the first half of the year Tullow sold a number of non-core assets for a total of $1 billion.
Included in that was the disposal of its 11% interest in the M’Boundi field to the Korea National Oil company and its 40% interest in the Ngosso licence, offshore Cameroon, to MOL.
Recent drilling in Ghana and Uganda has raised the reserves potential of the group significantly.
The groups Jubilee discovery off Ghana has estimated reserves of 1.8 billion barrels of oil which is expected to rise further as the group carried out further drilling.
Tullow is bringing three drilling rigs to Ghana to explore the Jubilee field and the first will start oil production in 2010.
Exploration results will be announced from September, Hickey said.
Two additional exploration wells in Ghana may yield 1 billion barrels of oil, according to London analysts.
Tullow has already drilled 13 wells, all of them positive, in Uganda and the company is seeking between 350 million and 400 million barrels of oil in the Butiaba area to make the field viable for the development.
