Tullow raises new funding of €1bn

TULLOW Oil has raised just under £1 billion (€1.15bn) in a share placing in order to fund fresh exploration and the ongoing development of existing assets.

The £925 million (€1.06bn) is coming from the placing of 80.4m new ordinary shares, which represent just under 10% of the Irish-founded oil and gas exploration company’s existing issued share capital.

Approximately $500m will be used by Tullow on future exploration projects, while the remainder will go towards the further development of headline assets.

The company, which is now headquartered in London and has its shares listed both there and in Dublin, is planning to drill more than 30 wells this year, including two in the South American country of French Guiana.

In an additional trading update, published yesterday, Tullow’s management reiterated that first oil production from its headline asset — the Jubilee field in Ghana — is on track for the fourth quarter of this year. The company’s full-year results for 2009 are set to be published on March 10, but yesterday’s update estimated last year’s total production levels at 58,300 barrels of oil equivalent per day (boepd), with this year’s total likely to come in at between 55,000 and 57,000 boepd.

In addition, Tullow’s total revenues for 2009 are expected to amount to £570m. This would be down by around 18% on the 2008 figure of £692m; mainly because of lower sales volumes during the year and “the significant reduction in realised commodity prices”.

Tullow’s shares were down, in Dublin, by 84c yesterday at €13.30.

Meanwhile, management said — on an investor conference call — that Chinese oil giant CNOOC and French company Total were two possible partners for it in Uganda, should the Government there give Tullow the nod to complete its proposed deal to buy out the 50% stakes in two blocks in the Kasamene oil and gas field, currently held by Canadian company, Heritage. Tullow owns the other 50% of both stakes and will be seeking a development partner on the assets.

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