Tullow Oil plc has announced its 2017 first half of the year results; the oil company has indicated that it attained revenues of $0.8 billion, gross profit of $0.3 billion and free cash flow of $0.2 billion. Paul Mcdade, the Chief Executive Officer said “Despite continued challenging market conditions, Tullow performed well in the first half of 2017 delivering strong revenues and organic free cash flow”
Kenya’s’ Exploration and appraisal
The company has posted that the exploration and appraisal campaign in Kenya has progressed to schedule in 2017 with two discoveries made so far. The first discovery was made in January 2017 at Erut-1, which proved that oil has migrated to the northern limit of the South Lokichar basin. The second was made in May 2017 at Emekuya-1 which encountered significant oil sands, demonstrated oil charge across a significant part of the Greater Etom structure and further de-risked the northern area of the basin.
The Etiir-1 exploration well, which targeted a large, shallow, structural closure immediately to the west of the Greater Etom structure, spudded in late June and was unsuccessful with no material reservoir development or shows encountered. Although dry, this well has helped define the westerly extent of the Greater Etom Structure. The Group also drilled the Amosing-6, Ngamia- 10, and Etom-3 appraisal wells, the results of which are being incorporated into ongoing field development planning activities.
A further three wells are planned this year and drilling is under way on the first of these wells to test an undrilled fault block adjacent to the Ekales field. The second well is Ngamia-11, an appraisal well that will be drilled and completed for use in an extended water flood pilot test in conjunction with the Early Oil Pilot Scheme (EOPS). The third well is the Etete exploration well which is planned to test a prospect adjacent to the Greater Etom structure. Further locations are currently under evaluation to be added to the programme. Water injection testing on the Amosing and Ngamia fields has been completed and underpins the feasibility of water injection for the development of these fields.
In addition to the drilling and operational activities to support FID for the Kenya Full Field Development, engineering studies and contracting activities are under way in preparation for the start of FEED, which is expected to commence in late 2017. In parallel to the upstream development work, the JV Partners and the Government of Kenya continue to progress commercial and finance studies for the proposed export pipeline, and preparations are under way for the Environmental and Social Impact Assessment.
The EOPS Agreement between the JV Partners and the Government of Kenya was signed on 14 March 2017 allowing all EOPS upstream contracts to be awarded. The first phase of the EOPS will be the evacuation of the stored crude oil, which was produced during extended well testing in 2015, to Mombasa by road. This initial phase of the project has been deferred by the Government of Kenya. The EOPS production of 2,000 bopd is expected to commence around the end of the year and will now include an extended water-flood pilot test in Ngamia. Results from the Ngamia waterflood
pilot will assess sustainable production levels to inform the overall resource and Full Field Development Plan.
“The focus of the East Africa team in the first half has been on Kenya. We have made good progress with our E&A programme in Kenya, including new discoveries at Erut and Emekuya, and we will update the market on the resources in the South Lokichar basin as the current E&A campaign concludes. In parallel, the project team continues to work towards FID in Kenya for the Full Field Development project, with heightened focus on financial discipline and effective and efficient pre-FID capital allocation. In Uganda, progress towards FID continues following the signing of our latest significant East African farm-down which will deliver c.23,000 bopd with no additional capex.” Said Mark Macfarlane, Executive Vice President for East Africa commented on 26th July