Tullow Oil : AGM Trading Update

Published on: 30 April 2015

Tullow Oil plc (Tullow) issues the following trading update, for the period 1 January to 30 April 2015.

This statement is issued in advance of the Group's Annual General Meeting which is being held at the Haberdashers' Hall in London, at 12pm today. The Group will announce its July Trading Statement and Operational Update on 1 July 2015. Half year results will be announced on 29 July 2015.

• Group average working interest production for the first quarter 2015 is in line with expectations; West Africa averaged 65,800 bopd and Europe averaged 9,000 boepd. Full year guidance remains unchanged for both regions.
• The Special Chamber of the International Tribunal of the Law of the Sea (ITLOS) in Hamburg has rejected Côte d'Ivoire's request that Ghana be ordered to suspend all oil exploration and exploitation in the disputed area including the TEN Project.
• The TEN Project is now over 55 percent complete with all 10 of the wells expected to be online at first oil already drilled. The project remains within budget and on schedule with first oil expected in mid-2016.
• Progress continues across the East Africa development towards the option to sanction the project by the end of 2016.
• Continued appraisal success in the South Lokichar basin further underpins resource base of 600 mmbo.
• $200 million exploration budget for 2015 includes high-impact wells in Norway (Bjaaland & Zumba), Kenya (Cheptuket) and Suriname (Spari).
• Additional $450 million funding capacity secured under existing credit facilities and RBL covenant amended.
• Year to date revenue and cost of sales are in line with expectations; business remains well funded with current net debt of approximately $3.5 billion and unutilised debt capacity and free cash of approximately $2.3 billion.
• Major Simplification Project is well under way and will deliver savings of around $500 million over three years.
• Capex guidance for full year 2015 remains unchanged at $1.9 billion.

"Over the last six months Tullow has reset its business to deal with the fall in the oil price. We have increased our existing debt facilities, amended our banking covenants, suspended our dividend, refocused our capital on near term production and are making substantial cost savings across the Group. Operationally, we have performed well with good progress in Kenya in the South Lokichar Basin and at the Jubilee field in Ghana where we have seen increased oil production due to sustained gas export. The TEN Project remains within budget and on schedule for first oil in mid-2016 and the recent decision from the arbitration between Ghana and Côte d'Ivoire allows the project to continue. Because of the actions we have taken and the recent ITLOS decision, the outlook for the remainder of this year and into 2016 is very positive. We are on track to deliver 100,000 bopd net production from our West Africa portfolio in 2017 and are identifying exploration prospects to target as part of future drilling campaigns."

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