Tullow issues trading update

AA – Tullow Oil plc (Tullow) issues the following Trading Update, for the period 1 January to 28 April 2016. This statement is issued in advance of the Group’s Annual General Meeting which was held at Tullow Oil plc, Building 9 Chiswick Park yesterday. The Group announced its Trading Statement and Operational Update on 30 June 2016. Half year results will be announced on 27 July 2016.

Highlights

• Group working interest production for the first quarter averaged 59,200 bopd for West Africa and 6,500 boepd for Europe. This was marginally below expectations due to the need to implement new Jubilee off-take procedures at the end of March following damage to the Jubilee FPSO turret bearing.

• New Jubilee off-take procedures being implemented with off-take and production to resume in the next few days. Group production guidance will be re-issued once new operating arrangements have stabilised. No material impact on future Group cash flow is currently expected due to continued production and appropriate insurance policies in place.

• The TEN Project is now over 90 per cent complete and first oil remains on target for July/August 2016.

• East Africa Governments agreed to develop resources in Uganda and Kenya with separate export pipelines.

• Ongoing assessment of recently completed South Lokichar appraisal programme in Kenya indicates potential to increase recoverable resources up to 750 million barrels with further exploration potential supporting an upside of 1 billion barrels.

• Working hydrocarbon system discovered with the Cheptuket-1 exploration well in Kenya’s Kerio Valley Basin.

• Routine six-monthly Reserve Based Lending redetermination process completed. Debt capacity of $3.5 billion secured.

• Revolving Corporate Facility extended by 12 months to April 2018, with an initial committed amount of $800 million as of April 2017. An accordion feature has been agreed with Lenders for an additional amount of $200 million.

• End of April net debt estimated to be c.$4.5 billion and unutilised debt capacity and free cash of c.$1.3 billion. Capex guidance for full year 2016 revised down by c.$0.1 billion to c.$1.0 billion with further savings expected.

AIDAN HEAVEY, CHIEF EXECUTIVE OFFICER, TULLOW OIL PLC, COMMENTED:
“It has been a very busy start to the year for Tullow. In West Africa, we have made excellent progress with the TEN Project which remains on time and on budget while a highly experienced project team are dealing with the turret issues on the Jubilee field FPSO. Following the decision of the Kenyan and Ugandan Presidents to develop standalone export pipelines, we now have much greater clarity and certainty around oil production in both countries. In Kenya, our appraisal campaign has also been very successful with ongoing assessment indicating increased resource estimates. Finally, I am very pleased to announce the completion of our RBL re-determination and the extension of our RCF. This demonstrates the continued strong support of our lending banks and is an important sign of confidence in Tullow’s excellent asset portfolio.”

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