Business News of 2014-08-05

Gas-flaring restores oil production target

After receiving approval to burn gas at the Jubilee field, Tullow Oil, the field’s operator, says it is on track to achieve its average production target of 100,000 barrels per day (bpd) for 2014.

The Environmental Protection Agency (EPA) in June gave Tullow the greenlight to burn 500 million standard cubic feet (mmscf) of gas monthly after the Jubilee partners warned that the continued re-injection of gas into oil wells could cut output by at least 5,000 bpd.

Gas flaring will take place till end of October when the processing facility being built at Atuabo is expected to be ready to receive gas from the Jubilee field.

The ability to maintain its Jubilee output target is expected to contribute significantly to the revenue performance of UK- and Ghana-listed Tullow, which reported a US$95million loss after tax in the first six months of the year following exploration write-offs and a loss arising from the sale of its business in Uganda.

Half-year results

Despite the loss, revenue and gross profit for the period were in line with expectations, Tullow said. The sales revenue for the first half, US$1.265billion, was down by 6 percent compared to the same period last year.

Commenting on its operations in West Africa, the company said production attributable to its interest averaged 63,900 bpd in the first half of the year. It cited “good progress in major West and East Africa developments” and said “the Tweneboah-Enyera-Ntomme (TEN) project in Ghana is 30 percent complete, on budget and on track for the first oil in mid-2016.”

Aidan Heavey, Chief Executive of Tullow, commented: “In the first half of 2014, Tullow made further important discoveries in Kenya and Norway and we have a concentrated exploration campaign planned for the next 18 months. We have also made good progress with the TEN ... With strong revenues and cash-flow from our existing production and a well-funded and diverse balance sheet, Tullow is well placed for the remainder of this year and 2015.”

Unchanged Dividend

The company’s board is maintaining the interim dividend at 4 pence per share, same as what shareholders were given in the first half of 2013.

The company has earmarked October 3 to pay the dividends. While shareholders with registered businesses in the UK and countries outside the Eurozone will be paid their dividends in pounds sterling, shareholders on Ghana’s branch register will be paid in the local currency.

The conversion rate for the payment in other currencies beside the pound sterling will be determined using the exchange rate as at 15 September, 2014.

Source: B&FT
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