Tullow Oil plc celebrated its most successful year so far in 2008 as businesses, banks and financial systems collapsed all around it.
Because
He has just led Tullow Oil plc through probably its most successful year ever and 2009 is also shaping up to be an exciting year. All the talk these days may be of peak oil but Tullow Oil looks like it has no notion of adhering to such a concept.
Drilling success
It achieved massive success with its drilling programme in 2008, most notably in Africa. Of course, success breeds an appetite for money and so it was no surprise, given its level of current and proposed activity, that the exploration company announced and successfully executed an equity placement. Over €400m worth of the company’s shares were snapped up in the placement, which saw nearly 70 million new shares put on the London market at £6 each. This leaves Tullow with 787 million issued shares and a market capitalisation of over £5bn. Tullow also said that it has nearly completed the process of raising its debt facilities to $2bn which will allow it to undertake major development projects in both Ghana and Uganda. In the current nervous climate, the success of both the equity placement and the debt refinancing is perhaps all the comment that is needed on the health of the company.
Trailblazer
But the oil industry is altogether more exciting than just equity and debt. At its heart is the drive to find black gold and to get it pumping from the ground in some of the world’s most challenging environments. And in this, Tullow Oil has proven to be a trailblazer.
The company had 100% exploration success in 2008 in Ghana and Uganda – a fine achievement in a world that some say is running out of oil – and Tullow made 17 discoveries from 22 wells in its overall drilling programme. Appraisal of the company’s Ghanaian Jubilee field confirms major resource potential of up to 1.8 billion barrels and a most-likely case of up to 1.2 billion barrels. It hopes to be pumping oil from this field in the second half of 2010.
Largest in Africa
Tullow has also made major world-class discoveries in Uganda. Some commentators have estimated that its discovery around Uganda’s Lake Albert may be one of the largest in Africa and its blocks in the area could contain 500 million barrels of oil. Tullow’s reserves have climbed from 551 million barrels at the end of 2007 to an estimated 800 million barrels at the end of 2008. On average, during 2008 it pumped an average of 66,600 barrels of oil a day.
When announcing the recent equity placement, Heavey said that the company had its best ever year in 2008 with “phenomenal exploration and appraisal results in Ghana and Uganda, significantly increasing the group’s booked reserves and resources estimates”.
Operational strength
He noted that the company had made a strong start in 2009 and “looking ahead, Tullow has excellent opportunities to continue to grow its business and high grade the portfolio, with our main focus on Ghana and Uganda. Our success, and strong support from our shareholders and banks, means that the equity placement announced today and the imminent closure of our debt refinancing will secure funding and give Tullow very significant financial and operational strength for the next phase of transformational growth”.
Highlights
- 1985: Aidan Heavey founds Tullow Oil.
- 1989: Tullow listed on London stock exchange.
- 1990s: firm expands to Pakistan, Bangladesh and Cote d’Ivoire
- 2004: acquisition of Energy Africa for $570m.
Business & Finance, in association with MERC Partners, has been awarding excellence in business through the ‘Business Person of the Month’ award over the last number of years. These awards seek to recognise noteworthy achievements in business leadership, and particularly those that make a telling contribution to the wider business community in Ireland.
