The Guardian (UK): Tullow grabs £200m North Sea gas territory: “Tullow Oil has again demonstrated its growing ambitions - this time by scooping up pounds 200m worth of gas fields in the North Sea from Shell and partner ExxonMobil.” (ShellNews.net) 21 Dec 04
Dec 21, 2004
Tullow Oil has again demonstrated its growing ambitions - this time by scooping up pounds 200m worth of gas fields in the North Sea from Shell and partner ExxonMobil.
The move by the Irish-based, London-listed independent follows the $570m (pounds 290m) takeover of Energy Africa this year which made it a significant player in Gabon and Ivory Coast.
Shares in Tullow, which have already almost doubled this year, rose a further 3% to 149p, on hopes the company could drastically increase the field life of its Schooner and Keth acquisitions.
Chief executive Aidan Heavey said he was also expecting to capitalise on rising gas prices in Britain as shortages loom around 2006-07.
"This is one of the best packages of North Sea assets that have come up for sale for a long time. Only 23% of gas reserves have been recovered so far, but we plan to get this up to 50%," he explained.
Tullow plans to invest pounds 140m in the area over the next two and a half years. It is also keen to explore some surrounding acreage that comes with the assets. The firm already has platforms and pipelines in the area so is well-placed to exploit any further reserves in the region.
Enthusiasm for gas reserves is encouraged by the fact that the UK has just become a net importer and prices have risen to 35p per therm, from half this level just 18 months ago.
There is a growing expectation that the value of gas will rise further as new supplies from Norway plus imports of liquefied natural gas will not start until later in the decade.
The past 12 months have been good for independent exploration and production companies.
Very strong oil prices plus the spectacular finds by Cairn Energy in Rajasthan have reinvigorated investor interest in smaller firms. The retreat from the North Sea by oil majors such as Shell and ExxonMobil is part of a trend.
Shell insists it is still committed to the region but has been selling off what it considers non-core holdings as part of a much wider portfolio shake-up.