Drilling in April to turnaround Tullow’s tough times
Tullow Oil has reported a post-tax loss of $1.22 billion for 2020, with production to continue sliding in 2020.
The company took major write downs on its Kenyan and Ugandan operations, of $430 million and $451mn respectively. A decision to cut long-term oil price expectations drove the Kenyan cut, while Tullow completed the sale of its Ugandan assets to Total.
Tullow is sharpening its focus on Ghana, where it plans to drill four wells this year.
“We will start a multi-year, multi-well drilling programme in Ghana next month to deliver sustainable and profitable production growth,” said Tullow’s CEO Rahul Dhir.
Tullow has contracted the Maersk Venturer to carry out a multi-well programme over at least four years. This year, it will drill four wells. These include two Jubilee production wells, one water injector and on TEN a gas injector, which will support two Ntomme producers.
This drill should offset near-term production decline. Output should “materially recover” in 2022.
Tullow has said it expects to reduce drilling costs by 20% in this drilling programme.
“Our self-help initiatives will deliver c.$1 billion, including over $700 million from asset sales in the past year. Strong business delivery, increased liquidity and improving commodity prices support constructive refinancing discussions,” Dhir said.
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