Tullow Oil for $440m in writedowns
TULLOW OIL will take a charge of about $440 million (€351 million) in its first-half results after writing down the value of lower priority projects – but it had good news for investors yesterday concerning its productivity in Ghana.
The oil explorer said it had conducted a “thorough review” of the exploration asset values on its balance sheet and so would take write-downs of about $360 million. The more bearish assessment covers projects in Ghana, Namibia, Mauritania and Sierra Leone.
A spokesman said the write-downs had primarily been triggered by the company focusing its efforts elsewhere: “The projects being written down are much less likely to be executed.”
Tullow is also taking $80 million of write-offs associated with unsuccessful exploration activities during the first half of 2012.
However, the company said there had been good progress in remedial work to address a decline in productivity at some of the wells at its flagship Jubilee project in Ghana. First-half results due later this month will include a $700 million pre-tax profit related to the disposal of two-thirds of its Ugandan interests.