Tullow upbeat on African potential

13 April 2012

IRELAND'S Tullow Oil is launching its biggest exploration programme as it builds on this year's £316m acquisition of Energy Africa.

Tullow hopes to drill nine wells between now and Christmas and another 15 in 2005. Operating profits at the group, which owns a host of fields from the North Sea to Uganda, rose 32% to £30.9m in the six months to 30 June.

Profits were helped by record oil prices, which have surged amid political unrest in the Middle East.

The company sealed a $500m takeover of Johannesburg-listed Energy Africa earlier this year, forming one of the biggest oil firms focused on west Africa.

It has brushed aside concerns over operating in African state Equatorial Guinea, which was recently rocked by a suspected coup plot.

Authorities in Equatorial Guinea put 19 accused coup plotters on trial last month, but the trial was suspended after Sir Mark Thatcher the son of former British Prime Minister Margaret Thatcher was arrested in South Africa on suspicion of helping to bankroll them.

However, chief executive Aidan Heavey said the company had no concerns over operating in that country.

'As far as Equatorial Guinea is concerned, we've had no problems there,' he told news group Reuters.

'Africa's been a great place to do business. We've never missed a day's production.'

The company also announced an interim dividend of 0.5p.

Tullow shares were down 1 1/4p at 128 1/2p bt mid-morning.

The shares of niche oil exploration firms such as Tullow and Cairn Energy have soared in the past year as rising oil demand increases pressure to find and drill new reserves. Tullow's shares have leapt 50% since the start of 2004.

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