In the November 2024 Trading Update released by Tullow Oil on November 28, 2024, it was reported that production from the Jubilee Oil Field had slowed slightly to 89,000 barrels per day (bpd) by the end of October 2024. This is a decrease from the higher production level of over 90,000 bpd that was achieved at the end of July 2024.
The company attributed the marginal decline in production to issues with some of its wells on the Jubilee Field, which led to a reduction in overall output from the field. These well-related challenges have been identified as a key factor affecting the field’s total production during this period.
While Tullow Oil did not provide specific details on the nature or extent of the well issues, the company emphasized that it is actively addressing these problems to stabilize and optimize production moving forward. The update reflects the company’s efforts to manage production levels and maintain steady output from the Jubilee field, which remains a vital asset in Tullow’s portfolio.
The November 2024 Trading Update from Tullow Oil revealed that the slower production rate of 89,000 barrels per day (bpd) at the Jubilee Oil Field by the end of October 2024 fell below expectations. The company attributed this underperformance primarily to the J69-P Well, which had underperformed as previously flagged in earlier reports.
In addition to the good issues, Tullow Oil also linked the production challenges to unplanned downtime at the Ghana Gas Company’s onshore gas processing plant. This downtime, coupled with periods of reduced water injection resulting from power outages, further contributed to the dip in overall production from the Jubilee Field.
These technical and operational challenges have affected the field’s output, but Tullow Oil indicated that they are actively working on resolving the issues to return the field to optimal production levels. The company is focused on addressing the J69-P Well‘s performance and ensuring more reliable operations at both the gas processing plant and water injection systems to stabilize and improve production moving forward. Tullow Oil remains optimistic about the future of operations at the Jubilee Oil Field, despite the challenges faced in the second half of 2024. The company expressed confidence that the corrective measures they have implemented will help improve performance going forward. These measures, alongside further production optimization activities, are expected to mitigate the production declines experienced during the latter part of the year.
Tullow Oil believes that these steps will stabilize operations and help address the issues with the J69-P Well, unplanned downtime at the gas processing plant, and power-related water injection challenges. The company anticipates that, with these improvements, production levels will stabilize and potentially increase in the coming months, helping to achieve more consistent output from the field as the company enters 2025. Tullow Oil also highlighted that the FPSO uptime (Floating Production Storage and Offloading) at both the Jubilee and TEN fields has remained high, with an average of 98 percent year-to-date. This strong uptime indicates that the critical infrastructure has been functioning reliably, despite the challenges faced with some of the wells and operational issues.
The company is optimistic that these positive developments, along with the corrective actions taken, will improve production and resolve the issues by the end of 2024.
Additionally, Tullow Oil is set to implement a 4D Seismic programme in Ghana, beginning in January 2025. This advanced seismic technology will provide further data to optimize well locations for future drilling programs, potentially enhancing the efficiency and success of their operations moving forward. The deployment of the 4D seismic program is expected to be a key part of the company’s efforts to improve well performance and optimize production at the Jubilee and TEN fields.
In its November 2024 Trading Update, Tullow Oil disclosed that the Government of Ghana currently owes $40 million for gas supplied from the Jubilee and TEN fields. The company described this as overdue gas payments from the government.
Tullow Oil believes that once this debt is settled, it will have a significant positive impact on its financial position, contributing to a more favourable outlook for the company by the end of 2024. The timely resolution of this financial issue is expected to help improve the company’s cash flow and strengthen its overall financial standing as it continues to navigate operational challenges and implement corrective measures to optimize production.
In the November 2024 Trading Update, Tullow Oil also shed light on a significant financial challenge related to the Government of Ghana‘s outstanding debt for gas supplied from its Jubilee and TEN fields. The total amount owed by the government for gas deliveries is reported to be $40 million, which has been described as overdue.
This overdue payment from the government is a key issue for Tullow Oil, as it affects the company’s cash flow and overall financial health. However, the company expressed optimism that once the debt is settled, it would positively impact their balance sheet and financial position, providing much-needed liquidity to support operations and growth.
Tullow Oil highlighted that this outstanding debt is being actively managed, and the resolution of this issue is expected to improve its financial position as it enters 2025. The company is hopeful that a settlement will be reached soon, which could help alleviate any financial pressure stemming from the overdue payments.
Additionally, Tullow Oil has also been focusing on improving its operational efficiency through production optimization activities and corrective measures in order to achieve better output and financial stability. Coupled with strong FPSO uptime and the upcoming 4D seismic program for further drilling optimization, the resolution of the government’s debt is seen as a critical step in stabilizing the company’s financial outlook.
Once the payment is made, Tullow Oil believes it will provide the company with the financial flexibility to continue its key projects, manage operational costs, and meet future production targets.
