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Tullow making progress in its retreat from North Sea

TULLOW Oil has said it is continuing its retreat from the North Sea after selling stakes in two UK fields to Faroe Petrolum in April.

In an update on trading, Dublin-based Tullow said it is "making good progress with selling the remainder of its UK and Dutch North Sea assets".

The company decided in 2012 to sell off its gas assets in the UK and Netherlands to focus on light oil assets in places like Ghana.

It has interests in around 30 UK North Sea blocks.

Tullow sold majority stakes in the Ketch and Schooner fields to Aberdeen-based Faroe for up to £135 million in April.

Tullow's chief executive Aidan Heavey said then efforts to sell stakes in North Sea assets were taking longer than initially expected but market conditions were improving.

North Sea deal activity has increased in recent months with buyers from the UK and overseas acquiring assets others had decided were non-core.

Tullow entered the North Sea in 2000 when it bought gas assets in the area from BP, for £200 million. It expanded through acquistions and licence awards and used the cash generated from North Sea production to fund exploration elsewhere.

In December 2012 Tullow said its Southern North Sea business had been a key contributor to growth, but added: "Following exploration and development success in Ghana, Kenya and Uganda, these assets are now non-core to the group and no longer fit within Tullow's light oil focused portfolio."

Tullow said first half production was impacted by underperformance at the Schooner-11 asset in the UK North Sea.

It still expects a year's production to average 85,000 barrels of oil equivalent per day.

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