Tullow to Invest $4 Billion in Ghana

Tullow Oil Plc, a U.K. explorer with the most licenses in Africa, may invest at least $4 billion with its partners to develop oil fields off Ghana's Atlantic coast.

Tullow, along with Anadarko Petroleum Corp. and Kosmos Energy Ltd., will begin engineering and design work for the Enyenra and Tweneboa fields in the Deep Water Tano block in September, Chief Operating Officer Paul McDade said.

The partners, also including Ghana National Petroleum Corp., will study a plan to produce 75,000 to 125,000 barrels a day from the fields, with first oil pumped in early 2015.

Tullow's Jubilee field, the largest in Ghana, is expected to pump 105,000 barrels a day in October, up from about 85,000 barrels a day currently, the company said in a statement today.

Enyenra and Tweneboa "are of similar scale to Jubilee, a little bit more complex," McDade said in a phone interview. "We are kind of thinking of $4 billion plus. That's our territory but it's quite uncertain at the moment."

Explorers, including Eni SpA of Italy and Russia's OAO Lukoil, are searching for oil and gas in Ghanaian waters. The country has become one of the world's top 50 oil producers since crude production began at Jubilee last year.

Tullow, based in London, will also proceed with development of Ghana's Teak, Mahogany East and Akasa discoveries in the West Cape Three Points Block after giving up a so-called acreage exploration license in the area, Exploration Director Angus McCoss said in an interview. Its projects in Ghana, Uganda, Namibia and Mauritania are able to produce more than 200,000 barrels of oil day, according to a presentation on its website.

West Cape

"We've reached the end of the exploration license," McCoss said. "We've drilled the big prospects. We do retain certain rights over the license, which we are pursuing." Anadarko, the partner in the West Cape Three Points Block, said yesterday the Akasa-1 well found a high-quality oil reservoir.

Tullow's first-half net income more than tripled to $311.3 million as revenue reached $1.1 billion, it said today in the statement. It doubled an interim dividend to 4 pence a share.

"Overall these should be taken as a solid set of results by investors, with a small beat to consensus earnings," Oswald Clint, an analyst at Sanford C. Bernstein & Co. said in an e- mailed report. Also, there's the "doubling of the dividend signaling management's confidence in continued cash flow."

Tullow reduced its full-year production estimate to a range of 82,000 to 84,000 barrels a day after delays at Jubilee.

The company is in talks with Ghana National Gas Co. over selling gas from the field within the country, "but we probably are still about 18 months plus away from having gas infrastructure in place," McDade said.

Delayed Results

Tullow advanced 8.4 percent to 1,026 pence by the 4:30 p.m. close of London trading, the biggest gain since Oct. 6, 2009.

The explorer delayed announcing drilling results from "the high-impact" Zaedyus well in French Guiana until September from August. The results from the Montserrado exploration well off Liberia are also scheduled for September, the company said.

Tullow expects to complete the sale of its interests in three Ugandan exploration blocks to Total SA and China National Offshore Oil Corp. for $2.9 billion in September, it said today. The company agreed to set up the joint venture with Cnooc and Total in March to develop the Lake Albert Basin oil fields.

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