Tullow begins gas production at North Sea facility

Tullow Oil said that gas production has begun from its Horne & Wren development in the southern North Sea while its Opal exploration well has discovered gas.

In an update on its UK businesses, Tullow said natural gas production from Horne & Wren, a 50/50 joint venture between Tullow and UK utility Centrica, began last week.

Gas is flowing at a rate of 60 million cubic feet per day and this will be ramped up to 90 million cubic feet over the coming days, the company said.

The field is Tullow's first operated development in Britain and forms part of Centrica's strategy of producing more of the gas it sells to consumers.

Meanwhile, the Opal exploration well, also in the North Sea and operated by Gaz de France's British unit, has encountered gas-bearing sands.

Information from the well is being analysed to ascertain the potential size of reserves.

Tullow has a 46 per cent interest in the discovery, although this may revert to the original equity of 30 per cent if certain back-in rights are exercised.

Tullow said it would provide a further update on the rest of its operations, which include exploration and production interests in west Africa and south Asia, in July.

Tullow also said yesterday that it had completed the sale of its Alba and Caledonia assets to Itochu Corporation for $112 million (€93 million).

Shares in Tullow closed 2.5p, or 1.4 per cent, higher at 183.75p in London last night, while in Dublin the shares added 12 cent, or 4.5 per cent, to €2.80.