By Eduard Gismatullin
Jan. 21 (Bloomberg) -- Tullow Oil Plc, the U.K. explorer seeking funds for projects in Ghana and Uganda, raised 402 million pounds ($553 million) by selling new shares and is in talks on increasing a debt facility to $2 billion.
Tullow today sold 66.9 million new shares at 600 pence apiece, equal to 9.1 percent of previous ordinary share capital, the company said in a statement. It’s in talks with banks on adding about $600 million to an existing $1.4 billion loan, using its stake in a Ghana offshore venture as collateral, Chief Executive Officer Aidan Heavey said today.
“We were blown away by support” from banks and shareholders, Heavey said on a conference call. It will pay about 3.75 percentage points more than the London interbank offered rate on the debt, Tullow said.
Tullow rose as much as 21 pence, or 3.5 percent, to 621.5 pence in London trading. The stock was at 617 pence as of 1:33 p.m. local time, valuing the company at 4.52 billion pounds.
“We note that over the past week the stock has given up most of the gains from four drilling successes in the past month, perhaps partly in anticipation of an equity issue,” Mark Bloomfield, a London-based analyst at Citigroup Inc., said today in an e-mailed report. Tullow fell 9.3 percent last week.
Jubilee
The London-based company plans to invest about $3.1 billion to develop the Jubilee field off Ghana and start pumping oil there in 2010. Tullow is targeting about 4 billion barrels of oil and gas resources in the Gulf of Guinea off Ghana and Ivory Coast, where it’s had “outstanding exploration success,” Heavey said.
Kosmos Energy LLC, Ghana National Petroleum Corp. and Anadarko Petroleum Corp. also hold stakes in the Ghana project.
Appraisal of the Jubilee field confirms “major resource potential” of as much as 1.8 billion barrels, Tullow said.
The company has also been exploring at Uganda’s Lake Albert, where it may sell part of its fully owned Block 2, Heavey said. It may invite a partner to share costs and build a pipeline to export oil from Uganda to Kenya’s port of Mombasa.
“We’ve exceeded reserves to make the Uganda project commercial” following exploration, the CEO said. “We’ve had lots of approaches” from potential partners, he said, adding that “we’ve decided not to talk about this for now.”
Raised Reserve
Tullow plans to invest 600 million pounds in projects this year, he said. The company replaced more than 500 percent of its reserves last year after producing on average 66,600 barrels of oil equivalent a day. It expects to cut output to 60,000 barrels a day this year.
The company increased its reserves estimate to about 800 million barrels of oil and gas as of the end of last year, up from a forecast of 551 million barrels, Tullow said.
“High-impact exploration wells -- Tweneboa and Teak in Ghana and Ngassa in Uganda -- are targeting over 1.5 billion barrels of gross upside potential and will commence drilling in the first quarter of 2009,” the company said.
Tullow canceled the sale of 11 percent of the M’Boundi oil field in Congo for $435 million to Korea National Oil Corp. because of opposition from the African state, Heavey said.
“It wasn’t a major item in our financing” plan, he said. “It was a small interest in a major field and non-material” and “we are quite happy to keep it.”
To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net
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