In its recent operational update, Tullow Oil reports that production from both the Jubilee and TEN fields realized over 97% operational efficiency and provided plans for the 2023 program.

Jubilee

The Jubilee field averaged 83.6 kbopd (31.9 kbopd net) in 2022. A good operational efficiency of c.97% was achieved and production was supported by four new wells (one producer and three water injectors) brought online in early 2022.

Two wells were drilled in the Jubilee South East area in the second half of 2022 and a third well is currently being drilled. Primary target reservoir results are in line with expectations with some deeper reservoirs also penetrated that have encountered additional resources for future potential development. These wells will commence production in the second half of the year after the installation and tie-in to the Jubilee South East Project subsea infrastructure, scheduled for the middle of the year, in line with the initial project schedule. The completion of the Jubilee South East Project will mark the completion of the major infrastructure spend in the Jubilee area. The majority of future capex is expected to be focused on drilling and completing new wells.

First oil from the Jubilee South East project will be a significant milestone, bringing previously undeveloped reserves to production. This project is being delivered on budget despite the inflationary environment and challenges associated with COVID-19 during 2020-22, highlighting Tullow’s project management strengths and ability to integrate deliverables across a global team.

The transition of operatorship to Tullow on the Jubilee FPSO took place in July 2022 and represented a major step in becoming a leading low-cost deep-water operator, realizing improvements in safety, reliability and cost. Following the transition, FPSO uptime averaged c.99% in the second half of 2022, compared to c.95% in the first half. Operations and maintenance (O&M) costs were c.30% lower in the second half of the year compared to the first, and 2023 full year O&M costs are expected to be c.23% lower than in 2021, demonstrating the sustainability of the structural changes delivered through the transformation and helping mitigate the impact of inflation through the supply chain.

In December, an interim gas sales agreement for 19 bcf gross of Jubilee gas was executed, valued at $50c/mmbtu, utilizing the price for TEN associated gas referenced in the 2017 TEN Gas Sales Agreement. The 19 bcf is expected to have been supplied by the middle of the year at an anticipated export rate in excess of 100 mmscfpd, adding c.7 kboepd net production during the first half of the year. Further gas export will be contingent on reaching agreement on acceptable commercial terms for future volumes.

In 2023, Jubilee oil production is expected to average c.95 kbopd (c.37 kbopd net), with a total of up to six new wells expected to come online, starting in the middle of the year. Gross oil production from the Jubilee field is expected to exceed 100 kbopd once all these wells have been brought online. The focus on operational excellence in production, drilling and major project delivery in recent years has yielded appreciable value and will continue to be an area of leverage for Tullow.

TEN

Production from the TEN fields averaged 23.6 kbopd (12.5 kbopd net) in 2022. A good operational efficiency of c.98% was achieved with overall production at the lower end of guidance.

Enyenra gross production averaged 6.8 kbopd for the full year, supported by a new production well (En21), which was brought online in September 2022 and will also contribute to production in 2023. Ntomme gross production averaged 16.8 kbopd for the full year. No new wells were brought online during the year but pressure support from gas and water injection resulted in steady production.

Two wells drilled in the Ntomme riser base area did not encounter economically developable resources and will not be completed in 2023 as originally intended, removing c.2.5 kbopd net from previously expected 2023 production.

The near-term focus on TEN is to sustain the strong operational uptime and improve gas handling on the FPSO this year. This will be implemented during a planned maintenance shutdown, scheduled for the third quarter of the year. Increased gas handling capacity will also facilitate a significant reduction in flaring and increased gas injection to support oil production.

The longer term plan is to monetize the significant remaining TEN resources through infill drilling particularly on Ntomme, phased development of new areas near existing infrastructure, development of the significant gas resources and drilling of prospective resources. Tullow expects to submit a plan of development to the Government of Ghana later this year.

In 2023, TEN production is expected to average c.20 kbopd (c.11 kbopd net), including the planned two-week maintenance shutdown. A water injection well (En16) which was brought online in December 2022 is expected to provide pressure support for production from Enyenra in 2023. No new wells are planned to be added in TEN in 2023.