Tullow Oil on schedule with Tweneboa Enyenra Ntomme project in Africa

Tullow Oil has stated that its much-anticipated $5bn flagship Tweneboa Enyenra Ntomme (TEN) project, off the coast of Ghana, is now 75% complete and remains on schedule and on budget to deliver first oil by the middle of next year.

The Irish-founded exploration firm’s chief executive, Aidan Heavey yesterday said the delivery of the project remains one of Tullow’s key short-term priorities, adding that it will boost production from Tullow’s west African assets to a net 100,000 barrels of oil per day (bopd).

Tullow owns a controlling 47.5% stake in TEN, which could produce around 80,000 barrels per day, and is not expected to seek a farm-out deal on that shareholding, despite previously considering one and currently being on a programme to deliver $500m (€466m) in cost savings over the next two years as it re-shapes its business to fit the current oil price environment.

“We expect to begin deleveraging our balance sheet with production from TEN and this project remains on time and on budget for mid-2016,” Mr Heavey said as part of Tullow’s latest trading update.

“As we approach the end of the year, we are focused on our priorities of generating steady cashflow from our operations, completing TEN on schedule and on budget, ensuring we retain appropriate liquidity and building on our exciting exploration prospect inventory for the future,” he added.

Earlier this week, Tullow’s share price jumped nearly 18% after one of its Kenyan-based project partners landed a lucrative farm-out deal for a number of licences.

However, yesterday, the shares retreated nearly 6% on the back of forecasts contained in yesterday’s update.

Tullow slightly pared back its full-year production targets for western Africa from a 66,000-70,000 bopd target to one of 66,000-67,000.

The Carlow-founded/London-headquartered company also marginally reined in its capital expenditure plans. Targets for this year are now understood to be slightly under the previously guided $1.9bn (€1.77bn) figure, while next year the company will spend “approximately $1.2bn (€1.12bn)”, viewed as being significantly down on previous guidance of $1.2bn-$1.4bn.

“A focus on cost and capital management is becoming relentless, albeit necessary, as evidenced by news on farm-outs and lower capex guidance,” commented Davy Stockbrokers analyst, Caren Crowley.