Tullow Oil announces 9% share placing

Tullow Oil today announced its intention to raise capital by placing up to up to 66,938,141 new ordinary shares, representing up to approximately 9.1% of the company's existing issued ordinary share capital.

A company statement said the exact number and price of shares to be place was subject to agreement and would be announced following the completion of a book-building process.

The placing is aimed at financing the development of new oil finds in Africa, the company said.

"Given the significant success of Tullow's ongoing drilling campaigns, the Company believes that it is now appropriate to increase its equity capital base to finance these exciting growth opportunities," the statement read.

"As well as strengthening the balance sheet, today's placing will allow Tullow to fund selective high impact exploration and appraisal opportunities in Ghana, to commercialise its world class asset in Uganda and also take advantage of other opportunities that may present themselves in the coming months."

The shares are expected to be traded on the Irish and London stock exchanges on January 26.

"Tullow has had an outstanding year in 2008 and in recent weeks has announced major exploration and appraisal success in both Ghana and Uganda," Chief Executive Officer Aidan Heavey, said:

"Further potentially transformational wells will be drilled in 2009 in both locations."

The company also issued a trading statement today in advance of its full-year results, revealing that in Ghana, its Jubilee field had the potential to produce up to 1.8 billion barrels and was on track to begin production in the second half of 2010.

Tullow said it produced, on average, the equivalent 66,600 barrels of oil a day in 2008, in line with its previous estimate and 9% lower than 2007. It has also upgraded its estimate of its reserves from 551 million to 800 million barrels of oil equivalent.

The company also said its debt refinancing is on schedule for close in February

"We have made a strong start in 2009 and looking ahead, Tullow has excellent opportunities to continue to grow its business," Heavey said.

Tullow shares had fallen 5% in late trading on the London stock exchange yesterday amid speculation that today's placing was imminent.