Tullow prepares to raise £18.9m

Exploration group Tullow plans to raise £18.9 million sterling (€29.3 million) after expenses through a placing and open offer to existing shareholders.

The money will be used to fund key exploration, development and production projects, including gas projects in India, Bangladesh and Pakistan, and for general working capital purposes.

Over the next 12 months, the company has planned a programme of exploration and development covering seven countries and including the drilling of six wells.

It expects gas production from two Pakistani fields before the end of the year and production should contribute substantially to revenues in 2000.

Tullow also said it did not expect recent political changes in Pakistan to affect its operations there.

"We have a long history of operations in Pakistan and are confident that the recent political changes there will have no adverse effect on our plans," said Mr Aidan Heavey, Tullow's managing director.

The company also announced that it had returned to the black with a pre-tax profit of €319,000 for the six months to June 30th compared to a loss of €5.6 million a year earlier.

Tullow said it was seeing tangible results from its policy of focusing strongly on gas-to-power development and said it was confident of a satisfactory outcome for the rest of the year, given the improved resource prices currently being experienced.

The placing and open offer are conditional on shareholder approval and Tullow also plans to seek approval for a change in its place of domicile from the Republic to Britain. This was in line with its goal of becoming a leading international player in the gas-to-power business.

It currently has dual headquarters in Dublin and London with the time of senior management divided between the two.

Under the terms of the open offer, shareholders will be offered one new ordinary share at a price of 52p sterling for every 22 shares held.

Holders of 11.7 per cent of the ordinary shares have already agreed to take up their allocation. The offer will close on November 30th.