Tullow updates Africa programs

Offshore staff

LONDON -- Tullow Oil has updated its exploration, appraisal, and development programs in Africa.

Ghana
Tullow has finalized the Phase 1 Plan of Development for the Jubilee field with the government of Ghana and is awaiting formal approval by the Minister for Energy.

Gas from the Jubilee oil field will be used for export to the local market and for improved oil recovery via gas injection, thereby avoiding flaring. The Jubilee field partners have agreed to supply the first 200 bcf of gas to the Ghana National Petroleum Corp. (GNPC) at no cost to assist in funding the necessary gas infrastructure. Gas volumes above this will be subject to sales agreements and will use the new strategic infrastructure owned and installed by GNPC. While Jubilee partners work with GNPC to ensure earliest possible first gas export, the FPSO will have the capability of injecting 100% of produced gas to avoid any delay to first oil.

The Jubilee Phase 1 development continues toward scheduled first oil in the 2Q 2010. Five development wells have been drilled, successfully encountering anticipated reservoir thickness and quality and a further four have been batch-drilled to an intermediate depth before drilling to total depth later this year, the company says.

Two development wells flow tested at rates of 16,500 and 21,000 b/d of oil, respectively. The company anticipates that at full development the wells will flow at rates of around 25,000 b/d of oil. Pressure data was acquired during the well tests from neighboring wells and demonstrated good reservoir connectivity across the field.

The construction of the FPSO and topsides modules in Asia is progressing to plan with the FPSO expected to arrive in Ghana for hook up and commissioning in 2Q 2010. The fabrication of the subsea equipment in Europe and the USA is under way with installation expected to begin in 1Q 2010, lasting approximately six months.

The Tweneboa-1 exploration well in the Deep Water Tano block (Tullow 49.95%) was completed in March and encountered 21 m (69 ft) of light hydrocarbon bearing sandstones, a deeper independent 4-m (13-ft) oil zone and an over-pressured zone at total depth. The light hydrocarbon accumulation, with P50 oil and gas potential of 250 MMboe and upside potential of 1.4 Bboe, is scheduled to be appraised with the Tweneboa-2 well in September.

The eastern extension of the Jubilee field is due to be appraised with two wells in the second half of this year. The Mahogany-4 well is expected to begin in mid-July and the Mahogany Deep-2 well in the fourth quarter. These wells are targeting reservoir potential to the east and below the main Jubilee field with the aim of better defining the resource range of 600 MMbbl of oil (P90) - 1,200 MMbbl of oil (P50) - 1,800 MMbbl of oil (P10). 3D seismic data over the Jubilee and Odum discoveries is currently being processed and interpreted to further improve the image of the subsurface, to enhance the surrounding prospectivity, and to optimize the location of the high-impact Teak exploration well (Tullow 22.9%) which is scheduled to begin drilling in the fourth quarter.

Côte d’Ivoire
Following the interpretation of a recently reprocessed 3D seismic survey in block CI-105 (Tullow 22.5%) offshore Côte d’Ivoire, the company has identified a significant Jubilee-type fan system. This material prospect, South Grand Lahou, is expected to be drilled in the third quarter.

Elsewhere in Côte d’Ivoire, a partial farmout of the Tullow operated block CI-103, reducing equity from 85% to 45%, has been concluded in advance of future exploration drilling campaigns. 3D seismic processing and reprocessing has been completed across blocks CI-103 and CI-102 (Tullow 31.5%) and interpretation of the extensive Cretaceous turbidite channels and fans, analogous to the Jubilee discovery in Ghana, is nearing completion.

After the interpretation of a 2D seismic survey offshore Liberia, Tullow secured a 25% interest in contiguous blocks LB-15, LB-16 and LB-17 in January. Acquisition of a 6,000 sq km (2,317 sq mi) 3D survey was completed in May and is being interpreted with encouraging early indications, the company says. Tullow is acquiring two more blocks elsewhere in the Liberian basin.

Production performance from the East and West Espoir fields (Tullow 21.33%) was in line with expectations for the first half of the year, averaging approximately 23,000 boe/d (gross). Downtime is scheduled in the second half of the year for the installation and commissioning of an upgrade to processing capacity on the FPSO, which is expected to increase gross production to 25,000 boe/d.

Equatorial Guinea
In the first half of 2009, both the Ceiba and Okume Complex fields (Tullow 14.25%) performed above expectations, with combined gross production averaging 105,000 b/d of oil. The development drilling campaign continues on the Okume Complex where the addition of a producing well coupled with a minor facilities modification allowed record production of 81,000 b/d of oil for several days. Gross combined Ceiba and Okume complex production is expected to average approximately 100,000 b/d of oil for 2009.

Gabon
Production from both offshore and onshore Gabon averaged 11,600 b/d of oil net to Tullow during the first half of the year. For its offshore operations, Tchatamba production (Tullow 25%) was impacted by power generation issues in the first quarter of 2009. Current Gabon production is approximately 12,400 b/d of oil following the addition of the first two Ebouri (Tullow 7.5%) development wells and is expected to be maintained at this level. On the Azobe exploration block, 3D seismic data is being reprocessed and the block reviewed in order to drill a well in the first quarter next year. On the Kiarsseny block, the well obligation has been swapped for a 1,000 sq km (386 sq mi) 3D seismic program that will be acquired during the third quarter this year.

07/09/2009