Tullow hopes of boost at Jubilee

Tullow Oil is on track to return to full-scale production levels at its headline asset — the Ghana-based Jubilee oil field — ahead of schedule, later this year.

The Irish-founded exploration company — which yesterday reported a record set of first-half figures — has for months been working on cost-effective solutions to ongoing mechanical issues, relating to well designs, at Jubilee.

The issues hampered production levels from the field. Tullow’s management said, in May, that full-scale production at Jubilee, should ramp up early next year.

However, yesterday’s first-half update noted gross production in Ghana should increase to over 90,000 barrels per day by the end of 2012; before rising to around 120,000 next year. A cost-effective solution to the problems at Jubilee should also save Tullow around €400m in capital costs.

The company yesterday reported a strong set of first half financials — featuring a 48% year-on-year increase in pre-tax profits to $829m (€683.2m) and a 10% rise in interim revenues to just under $1.17bn.

After-tax profit amounted to $567m; a 63% annualised increase. Earnings per share rose by the same percentage to 60.3c, while the interim dividend payment for shareholders was the same at 4c.

First half production levels rose by 3% — year-on-year — to 77,400 barrels of oil equivalent per day, with full year forecasts at 80,000-84,000 barrels.

Highlights of the first six months of this year included the major discovery at Tullow’s Ngamia-1 oil field in Kenya; which is tipped to be a major region for the company in the coming years; and the successful conclusion to its asset farm-down programme in Uganda.

The profits from the latter, along with increased production levels and sustained commodity prices, drove the strong rise in profits and revenue. Speaking yesterday, Aidan Heavey, Tullow’s CEO, said that Kenya, Ghana and Mauritania will take up much of the company’s focus this year, with its South American assets taking something of a back-seat until next year.

“A strong pipeline of activity in the second half of 2012 promises another excellent year for the group,” Mr Heavey said.