UK-based Tullow Oil will be unveiling a new strategy and plan to generate c. $7 billion of operating cashflow over the next 10 years with over 90% of its future capital expenditure focusing on the company’s West African producing assets.
Tullow is set to unveil its new strategy and plan that will focus on the substantial potential within the company’s large resource base associated with its producing assets where there is extensive infrastructure in place.
In Ghana, for example, Tullow has produced just 400 million barrels of oil (gross) from 2.9 billion barrels of oil in place (c.14%). This plan, alongside a rigorous focus on costs, is expected to generate material cash flow over the next decade, which the Group anticipates will enable reduction of its current debt levels and deliver significant value for its host nations and investors.
Tullow said in September it is still processing data from the discoveries it made last year at the 1,800km2 Orinduik block offshore Guyana.
The block partners had found oil at the Jethro-1 and Joe-1 wells, both of which were drilled within budget by the Stena Forth drillship. The Jethro-1 discovery comprised high quality oil-bearing sandstone 55m reservoir of Lower Tertiary age while the Joe-1 discovery comprised high-quality oil-bearing sandstone 16m reservoir with a high porosity of Upper Tertiary age.
Analysis of the results from both of the wells had confirmed that the samples recovered from Jethro-1 and Joe-1 are mobile heavy crudes with high sulphur content.
Tullow said in an update on Wednesday that it has considerable opportunities to unlock value in Kenya and South America. “These require an innovative approach and a deep geoscience and engineering expertise but do not require significant capital investment in the evaluation phase,” the company stated.
In Kenya, Tullow is in the process of re-assessing Project Oil Kenya to design an economic project at low oil prices whilst preserving the phased development concept.
“In South America, Tullow has material positions in emerging basins with substantial acreage in Suriname, Guyana and Argentina. Tullow’s current focus is to better understand the prospectivity in these basins,” the company said.
Tullow said group working interest production to date in 2020 has averaged 75,000 bopd in line with expectations. Full year guidance remains 73,000 to 77,000 bopd, reflecting continued good performance across the portfolio.
In Kenya, Tullow and its Joint Venture Partners are working with the Government on an extension to their exploration licences to the end of 2021.
“In Suriname, the prospective Goliathberg-Voltzberg North-1 well is on schedule to spud in Q1 2021,” the company stated.
Tullow is the operator at the Orinduik block offshore Guyana with a 60% stake, while Total and Eco Atlantic each hold 15% and Qatar Petroleum has the remaining 10%.