Tullow Oil PLC TLW Interim Management Statement

  Tullow Oil PLC (TLW) - Interim Management Statement

RNS Number : 0450R
Tullow Oil PLC
14 November 2012










                         Interim Management Statement

14 November  2012 -  Tullow  Oil plc  (Tullow)  issues the  following  Interim 
Management Statement, for the period 1 July to 14 November 2012, in accordance
with reporting requirements of the  EU Transparency Directive. The Group  will 
announce its full year Trading Statement and Operational Update on 11  January 
2013. Full year results will be announced on 13 February 2013.

Tullow's operational and financial performance in  the second half of 2012  to 
date has continued to be strong.  In Ghana, Jubilee field production  capacity 
has been enhanced and is expected  to exceed 90,000 bopd (gross) by  year-end, 
while the Plan of Development  for the TEN project  has now been submitted  to 
the Government  of  Ghana.  In  Kenya, the  second  exploration  well  in  the 
Lockichar Basin  has  successfully  encountered oil,  further  de-risking  the 
basin.  Additional  exploration  drilling  and  testing  results  across   our 
significant Kenyan and Ethiopian acreage position are expected before the  end 
of the year. The Zaedyus-2 well  is currently drilling offshore French  Guiana 
following up  on last  year's  basin opening  discovery. Tullow  continues  to 
enhance its exploration portfolio and widen its global footprint by adding new
offshore licences in Mozambique, Uruguay  and Greenland. The Group remains  on 
track to deliver average net production of 80,000 to 84,000 boepd for the full
year.  During  the  period,  Tullow   also  finalised  arrangements  for   the 
refinancing of its Reserves Based  Lending credit facilities, extending  final 
maturity to 2019.



Operational update

WEST & NORTH AFRICA

Ghana

The acid stimulation of certain Phase 1 production wells in the Jubilee  field 
has proven to  be successful and  gross production has  increased from  63,000 
bopd at the middle of 2012 to a recent production rate of around 85,000  bopd, 
in line with expectations.

In addition, the Jubilee Phase 1A development project is progressing well with
five of  the eight  wells drilled.  All  of the  wells have  encountered  good 
quality reservoir on prognosis.Following extensive unplanned maintenance work
on the Sedco Energy  rig, well completion operations  commenced at the end  of 
October and Phase 1A production is expected to begin from one well in the near
future. By the end of the year, an additional Phase 1A producer is expected to
be brought  on line  and a  further  acid stimulation  on a  Phase 1  well  is 
expected to  be  completed.  This  work is  expected  to  take  gross  Jubilee 
production above 90,000 bopd  by the end of  the year and capacity  production 
for the FPSO is expected  to be reached in the  first half of 2013 as  further 
Phase 1A production and injection wells come on line.

In the second  half of 2012,  the Tweneboa, Enyenra  and Ntomme (TEN)  project 
made good progress and Tullow and  partners submitted the Plan of  Development 
to the Minister  of Energy in  early November 2012.  The development is  being 
designed with sufficient flexibility  to allow both  TEN resources and  nearby 
discoveries to  be tied  into an  FPSO. Following  the Wawa  discovery on  the 
Deepwater Tano  block  in July  2012,  an  appraisal programme  is  now  being 
evaluated.The Okure exploration well to the  south of TEN is currently  being 
drilled and a result is expected in  the coming weeks. The rig will then  move 
to drill the Sapele exploration well to the southwest of Jubilee. These  wells 
will complete the exploration campaign on the block before the licence  period 
ends in January 2013.



Rest of the region

Production performance  elsewhere in  West  & North  Africa  is in  line  with 
expectations.  Three  work-overs  and  one  new  production  well  have   been 
successfully completed on the Ceiba field  in Equatorial Guinea this year  and 
five production  wells  are planned  to  increase current  production  levels. 
Appraisal and  infill drilling  has  been very  successful on  Tullow's  Gabon 
assets during the year.  The Tchatamba-South B9 well  has been drilled and  is 
now producing 1,100 bopd net and the more recent Limande-8 Hz development well
is also producing 1,400 bopd net to Tullow. Production from the M'Boundi field
in Congo (Brazzaville) has remained stable during the year following sustained
water injection and the continued work-over and infill drilling campaign.  Two 
recent wells successfully opened up and appraised a southeast extension of the
field.

In Mauritania, the  Banda gas  field has been  declared commercial  and it  is 
planned that the field will supply a power development. In September 2012,  in 
advance of the  major exploration campaign  scheduled to commence  in Q1  2013 
across various licences, the second part of a 3D seismic acquisition in  Block 
C-2 was completed.

Tullow hasalso  entered  into  an exclusive  negotiation  with  Hyperdynamics 
Corporation in respect  of a  potential farm-in  by Tullow  into a  concession 
offshore Guinea.



SOUTH & EAST AFRICA

Uganda

In the  Lake Albert  Rift Basin,  a busy  work programme  continues with  nine 
appraisal wells and four  well tests completed over  the period in support  of 
the development  plan. Plans  to  drill exploration  wells on  the  previously 
undrilled West of Nile trend are  also progressing with well pad  preparations 
nearing completion  at  the Omuka  and  Riwu  well locations.  Four  rigs  are 
currently active  in  the basin  with  a fifth  rig  mobilised for  the  EA-1A 
exploration drilling campaign.

In EA-3A, the Kanywataba-1 exploration well was plugged and abandonedas adry
hole in July 2012  and the associated exploration  licence for the  Kanywataba 
area, expired on 2 August 2012.  The partnership retains a production  licence 
over the Kingfisher  discovery and  work is continuing  on the  preparationof 
field development plans for submission tothe Government of Uganda.

Tullow, CNOOC and  Total presented a  joint development plan  concept for  the 
Lake Albert  Rift Basin  to His  Excellency the  President of  Uganda and  the 
Government of Uganda  in July 2012.  A Committee has  now been set  up by  the 
Government of  Ugandacomprising  representatives of  key  Ministries  andthe 
three Operators to discuss the remaining issues in order to progress the  Lake 
Albert Rift Basin development plan.



Kenya & Ethiopia

Following the excellent start to its Rift Basin exploration campaign in  Kenya 
with the discovery of over 100 metres of net oil pay in the first  exploration 
well, Ngamia-1  in Block  10BB, Tullow  commenced drilling  the Twiga  South-1 
exploration well in August 2012. The well  is located 22km north of Ngamia  in 
the adjacent Block 13T and  is testing a new  structure in the same,  Tertiary 
aged, geological basin as  Ngamia. On 31 October  2012, Tullow announced  that 
oil had been encountered  in the Twiga South-1  well and that further  details 
will follow after  the well has  reached Total Depth  (TD) and a  full set  of 
wireline logs have been run. These activities are expected to be completed  in 
the coming weeks  and a testing  programme on the  Twiga South-1 and  Ngamia-1 
wells is being considered.

Following the  Ngamia-1  success,  a  decision was  taken  to  accelerate  the 
exploration  programme  and  consequently   two  additional  rigs  have   been 
contracted for operations in Kenya  and Ethiopia. The Paipai-1 well  commenced 
drilling in  Block  10A onshore  Kenya  in  September 2012  and  is  currently 
drilling toward the planned TD of 4,500 metres to test a deeper Cretaceous age
basin. In Ethiopia, a rig is  currently being mobilised to drill the  Sabisa-1 
well in the South Omo  block, which is expected  to commence in late  December 
2012.

Significant seismic  activity  has continued  across  the acreage  during  the 
period. In Ethiopia, 1,000km of 2D  seismic was completed and the  acquisition 
of a further 500km of 2D commenced in  the Chew B'hir region of the South  Omo 
block. In Kenya,  a further 2,000km  2D seismic programme  is currently  being 
acquired in Blocks 13T, 10BA and  10BB. Additionally, an airborne gravity  and 
magnetic survey has  been acquired in  the 12B licence.  The exploration  team 
continues to  study many  leads and  prospects  within the  100,000 sq  km  of 
acreage that Tullow  operates in Kenya  and Ethiopia with  over 100 leads  and 
prospects already identified.

In offshore Kenya Block L8, the Mbawa-1 exploration well result was  announced 
in September 2012 after encountering approximately 52 metres of net gas pay in
the shallower primary target. This is the first hydrocarbon discovery offshore
Kenya and clearly demonstrates a working petroleum system. Although the deeper
targets at this location were unsuccessful, and the well has been plugged  and 
abandoned, these results will be instrumental in evaluating the remaining  oil 
prospectivity of this block.





Rest of the region

In Mozambique, Tullow farmed into the Statoil  operated Blocks 2 and 5 with  a 
25% equity. An extensive 2,000 sq km 3D survey has been acquired and two wells
are planned in 2013. Tullow is also currently acquiring 560km of 2D seismic in
Block 3111 in Madagascar. In Namibia, negotiations have resumed with  NamPower 
to finalise the Project Development Agreement and Gas Sales Agreement heads of
terms for  the Kudu  project, so  that the  design phase  of the  project  can 
proceed.



EUROPE, SOUTH AMERICA & ASIA

Europe

Production in Europe is slightly below expectations due to delays in new wells
being drilled on  the NAM operated  JDA in the  Netherlands. Elsewhere in  the 
Netherlands, a  Sales and  Purchase  agreement has  been  signed with  GTO  to 
acquire its exploration interests bringing Tullow's interest in most  licences 
in the area to 60%. 

In the UK  Caister Murdoch System  (CMS) area, the  single well tie-back  Katy 
development project is on schedule to deliver first gas in December 2012.

On  15  October  2012,  Tullow  announced  that  Naalakkersuisut,  Greenland's 
Government, has approved  an agreement with  Maersk Oil for  Tullow to take  a 
non-operated 40%  equity  position in  Block  9 (Tooq  licence),  Baffin  Bay, 
north-western Greenland. The main commitment in the first phase of the licence
had already been exceeded this summer, through the acquisition of 1,850 sq  km 
3D seismic.



South America

The Zaedyus-2 appraisal  well commenced  drilling in  July 2012  by the  Stena 
DrillMax and  is  located 5km  up-dip  of  the Zaedyus-1  discovery  well.  In 
addition to appraising the apex of the existing discovery, the well will  also 
target the Zaedyus  Deep fan  with results expected  in the  coming weeks.  An 
extensive 3D  seismic  programme  either  side of  the  Cingulata  fan  system 
commenced in July 2012. Over 750 sq km of 3D seismic has already been acquired
over the Cebus lead to  the southeast, and acquisition of  the 4,700 sq km  3D 
seismic programme to the northwest is significantly advanced.

In July  2012,  the  high-pressure, high-temperature  Jaguar-1  well  offshore 
Guyana was plugged and abandoned at a depth of 4,876 metres, without  reaching 
the  primary  objective  after  encountering  unusually  high  pressures.   An 
extensive review of both the Jaguar prospect and well designs has been carried
out and  the  Georgetown Joint  Venture,  including Tullow,  is  currently  in 
discussions with the government of Guyana  over the re-issuing of the  licence 
once it expires later this year.

In Block  47 offshore  Suriname, Tullow  completed a  3,000 sq  km 3D  seismic 
survey in early  September 2012. Early  results from the  data processing  are 
encouraging and  the  final  processed  volumes over  the  prospects  will  be 
available by the middle of 2013.

In October 2012, Tullow  signed 100% equity in  the offshore Uruguay Block  15 
PSC which covers 8,030 sq  km. The block lies in  the Pelotas Basin in  water 
depths between 2,000 and 3,000 metres. The geological plays being targeted are
similar to  the  Cretaceous stratigraphic  turbidite  plays that  Tullow  have 
targeted offshore West  Africa and South  America.Beginning an initial  three 
year phase, plans are under way to  acquire a 3D seismic programme in 2013  to 
allow further evaluation of the licence prospectivity.



South Asia

In March 2012, Tullow announced its intention to begin a process to divest its
Asia businesses. Tullow is proceeding with the sale process and has received a
number of offers for both the Pakistan and the Bangladesh businesses which are
currently under review.

Gross production in the Bangora field has been maintained at around 100mmscfd.
Planning is well underway for working over several of the Bangora wells in  an 
effort to restore production to the current plant capacity of 120 mmscfd.

In Pakistan, drilling of  the Kohat-1 exploration well,  located close to  the 
2010 Shekhan-1 discovery, was completed in early October 2012. The well flowed
gas and water and is interpreted to have encountered a fault zone. It has been
suspended for possible re-entry following  acquisition of 3D seismic over  the 
area. The transfer of the Sara-Suri lease, which had been awaiting  government 
approval for some time, was completed in August 2012.

Financial update

Year to  date  financials are  in  line with  expectations.  Forecast  capital 
expenditure for 2012 remains in the region of US$2.0 billion. As of 31 October
2012, net debt is approximately US$0.9 billion and unutilised debt capacity is
approximately US$2.2 billion. On 31 October 2012 Tullow finalised arrangements
for the  refinancing  of its  US$3.5  billion Reserves  Based  Lending  credit 
facilities, extending final maturity from 2015 to 2019.



Outlook

Tullow's exploration-led  growth  strategy continues  to  deliver  outstanding 
results for the Group. Exploration success in Kenya is opening up another  new 
basin in  East Africa  with  major upside  potential. Growing  production  and 
cashflow from the  Jubilee field  continues to  strengthen Tullow's  financial 
base as we  look forward  to further significant  exploration and  development 
programmes in 2013.



FOR FURTHER INFORMATION CONTACT:

Tullow Oil plc                    Citigate Dewe Rogerson Murray Consultants
(+44 20 3249 9000)                (+44 207 638 9571)     (+353 1 498 0300)
                                  Martin Jackson         Joe Murray
Chris Perry - Investor Relations
                                  Jack Rich              Ed Micheau
James Arnold - Investor Relations

George Cazenove - Media Relations



Notes to Editors

Tullow is a leading independent oil  & gas, exploration and production  group, 
quoted on the London, Irish and Ghanaian (symbol: TLW) stock exchanges and  is 
a constituent of  the FTSE  100 Index.  The Group  has interests  in over  100 
exploration and production licences  across 24 countries  and focuses on  four 
core areas: Africa, Europe, South Asia and South America.

For further information please refer to our website at www.tullowoil.com.



Follow Tullow on:

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ENDS

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IMSBKNDDOBDDBDD -0- Nov/14/2012 07:00 GMT