MT from Tullow statement today12 Nov 2014 08:37
Could we be going back to FG sooner than we think.
Strategic Overview
A review of the investment opportunities across Tullow's portfolio of activities is ongoing and, coupled with the current external environment, is indicating that the Group should re-allocate capital across the business towards producing assets and the commercialisation of existing discoveries.
The Group's core oil assets in West Africa - the TEN development project, Jubilee production and the non-operated West Africa portfolio - will generate significant value and cash flow for the Group and will attract the greatest share of capital in 2015. Exploration will continue to be a key part of Tullow's future growth strategy. However, given the current expectations for the oil price, reduced commercial success from offshore drilling and the lack of asset transactions, returns from drilling complex, deepwater wells are currently less attractive. In response, Tullow will now focus the majority of its exploration and appraisal expenditure on its operated onshore East Africa portfolio where significant value can be created by adding further resources and appraising existing discoveries to progress development in both Uganda and Kenya. In 2015, Tullow therefore expects to reduce net exploration and appraisal capital expenditure to around $300 million after the Norway tax rebate. During the year, Tullow will continue to seek new low cost and highly prospective exploration acreage in its core areas of Africa and the Atlantic Margins to ensure that the business continues to have an industry-leading exploration position.
In addition, the Group will continue to maintain a conservative financial framework and concentrate on a rigorous approach to both capital allocation and cost control across the Group. Tullow is focusing on maximising value from its asset base and positioning its business to benefit from improved market conditions in the future.
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