Tullow prices £925m placing at 1,150p

27th Jan 2010 14:07

Tullow Oil shares fell back Wednesday after its £925m fundraising was priced at a discount of more than 5% to last night's closing price.The placing of 80.43m shares with institutions at 1,150p each will finance activities in Africa and comes just a day after shareholders voted to buy Heritage Oil's 50% stake in Blocks 1 and 3A in Uganda.Last week, Tullow exercised a pre-emption right to snap up Heritage's holding in Uganda for $1.5bn, the same price offered by Italian oil giant Eni.There are also reports Tullow has lined up CNOOC of China and France's Total as potential partners in Uganda in an attempt to convince the country's government to back its bid rather than Eni's.A phase of accelerated exploration drilling and more significant development expenditure will result in additional capital spend of up to $600m over the next three years, Tullow said Wednesday.The news came as it revealed working interest production for 2009 averaged 58,300 barrels of oil equivalent per day (boepd), in line with previous guidance, and a drop in the realized oil price down to $60 a barrel.Average working interest production for 2010 is expected to be between 55,000 and 57,000 boepd. Total revenue for 2009 is expected to be about £570m from £692m in 2008 because of lower sales volumes and the significant reduction in realised commodity prices during the year.'2009 was another great year for Tullow,' said chief executive Aidan Heavey. 'The Jubilee development in Ghana remains on track and will firmly establish us as an offshore operator in Africa with the ability to deliver world-class projects.''Today's equity placing and Ugandan farmdown will ensure that we have the right capital structure to deliver further material value for all stakeholders across our entire portfolio. We look forward to 2010 with confidence.'Full-year results are scheduled for release on 10 March.