Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Tullow Oil PLC Conference Call. During the call, all participants will be in a listen only mode. You will need to press star one on your telephone keypad as we wait for your name to be announced. I do have to advise you this call is being recorded today, Wednesday, February 10.
And your speaker for today is Raul Dear. Please go ahead.
Thank you, Jody, and good morning, everyone. It's a it's a nice sunny sort of but cold day here in London, so I hope you guys are all still in one. Thank you for for dialing into this call, and it's our this is our second announcement in the last last two weeks. So, like, you know, I thought it was important that we have a quick call to cover off things. And so first, what I'll do is I plan to cover off really the substance of the RMS.
So that's the new announcement from last night. It was a slightly odd time as we made the announcement, but that was to allow Panoro to complete the book build last night. And I just wanted to put that deal in in in context. Then I also wanted to take the opportunity just to provide an operational update and then a little bit more color to the training statement that we should cover weekly. So that's kind of the agenda.
I'll cover that up quickly, and then we'll leave time for for for questions. But this should be a relatively quick call. So, you know, very pleased we've agreed the deals with with Finco, which is worth up to a $180,000,000. So what does that include? That includes our entire interest in equity equity.
So that's a non operated position, 13.25% in the Okuma Complex and the Toyota plants. The way the deal is structured is is the cash upfront of $89,000,000, and then they can come in payment of up to $16,000,000. So the total consideration was a 105,000,000. We are also selling Tupelo our entire interest in the the non op. There's a B2CQ asset in Gabon.
So that's again, it's a non operated. It's it's a small stake. It's a 10%. And the deal is structured similarly. So there's a cash upfront of $26,000,000, plus there is a contingent payment of another 20 up to 24,000,000.
So the total is $70,000,000. Now they're structured as two separate s p a. So two separate transactions with two separate s p a. And there's also another contingent payment, which is $5,000,000, which is paid at once both have completed. So that's kind of the overall kind of deal structure.
This is additional details. There is no tax on the disposal. We have full upfront approval from the actual clinic update. But given the size of the deal and our our market cap, I could tell you, know, we'll be a plus one transaction, so we require shareholder approval. We plan to have a circular that will be distributed later this month.
Also, in our press release last night, you would have seen there was a timing that that that that this is dependent on an equity raise from, you know, and I'm pleased to say this has been successful. So many congratulations to Adrian and and John Hamilton for a pretty remarkable job in that. And timing wise, we're expecting both the transactions to complete in the first half of twenty twenty one. I wanted to spend a bit of time just to explain the rationale. So you remember those of you who had said the Capital Markets Day in November that, you know, we've been very clear, both of them have been clear that any asset divestment, it needs to be value accretive accretive to the business, and it needs to strengthen the balance sheet.
And, you know, from our perspective, this transaction, it does this transaction, I should say, will be both. And from timing perspective, they're very supportive of the refinancing process that we're going through right now. And in that, they provide liquidity additional liquidity in the first half of twenty twenty one. But in addition to the mutual liquidity and the balance sheet impact, what's also important from our perspective is that we're able to redeploy the CapEx spend from these assets to our core of high return assets. That's again important thing.
If you remember, I talked at the Capital Markets Day. We have a very, very deep inventory of high return assets. I think you remember I talked about 60 plus investment opportunities with an average IRR of 80 plus percent. So what this allows us to do is to redeploy and the future CapEx that we we need to be. So that's a tremendous value creation in addition to the value that from the business side right now.
And also, importantly, we remove future new commodities. And I think when you look at it from both perspectives, it makes a lot of sense because we have higher current assets that we can redeploy. It will be in the the CapEx to them and it it becomes a win win from our perspective as well as from those. In terms of the actual kind of operating impact, there is about a $6,000 a day production impact and roughly sort of two p results of 20,000,000. And so that represents about a $9 per barrel valuation.
The actual impact of the 2021 production is going to depend on the timing of the completion. Just also, you know, I said it's value accretive and and it's also strengthens the balance sheet. So let me give you kind of a few numbers to to frame that. Firstly, there's very negligible impact on our RDL debt capacity. It's only about slightly over 2% of the borrowing base is impacted.
This will reduce our CapEx guidance by about 10%, so roughly 26,000,000. Over the ten year period, there is a higher impact on CapEx. So we've seen CapEx over the ten year probably impacted by about reduced by about $300,000,000. And that's the point I was making, which is that that money we can redeploy into our core much higher term generating assets. These are on average higher OpEx assets.
And on our portfolio, as you know, is about a 50 plus dollar OpEx compared to Ghana, which is substantially less than that. So this will reduce our group operating cash and make the business more resilient to lower oil prices. We have decommissioning liabilities associated with this of about $130,000,000 So those are the industries I think of. Overall, the 2021 pre financing cash flow, I will remember that's the number we focused on pretty similarly. So that's gonna be bolstered by about a $100,000,000 at $50.
And if you take all the kind of self help and asset sales and everything that we've done, this starts to kind of take the the 575,000,000, which is from the Ganda to the 500 that we received, another 75 that's contingent on the FID, which is expected this year. A 180 from this, along with the cash savings that we are now sort of banking of about a $125,000,000. Cost savings of a $125,000,000 per annum over two years, so that's that's that's $250,000,000. So that starts to add up to about $1,000,000,000 of self help and asset sales. So that puts the company, I think, in a pretty strong position.
Also looking at the analyst forecast, think overall, the deal is very much in line with consensus valuation. So I think we're we're we're quite pleased. I think it's a it's a win win for both companies. I think it fits in with our strategic intent to cope to focus on the high margin core assets. Obviously, we've been in Ethoca's unit for a number of years, have had a very good relationship with the government, and we are certainly kind of departing as friends, and there's been tremendous support from the government through this this process as well.
Gabon remains remains a core area for us. This is a non op, relatively small equity stake for us. So it gives us the opportunity to refocus in other areas and and and look to build
our business there. So that's with respect
to the deal. Let me also wanted I wanted to take the time since we're all here together to just update you on the kind of operational financial performance. And this is really building on what we shared with you at the trading statements that was two weeks ago. So just a quick recap on 2020. I think we will be doing that, you know, we delivered we did a good job despite all the challenges.
We delivered production in line with expectations about $75,000 per day. There's a tremendous effort by the team to really bring the cost structure down, and that's the $125,000,000 per annum that's sort of running through now this year and will continue. We we executed in Uganda, so that helped reduce our net debt. So we ended the year with a net debt of $2,400,000,000. Overall, you know, revenues were about 1,400,000,000.0, so that is at a $51 realization.
So that reflected a very successful impact of the hedging program. And, of course, we held the Capital Markets Day last year when we set out the the new business plan, and it's important because that's really what we are focused on right now, which is delivering high margins, high return opportunity that's been kind of executed. And the plan, just to remind you all, is is on on track to deliver very material cash flows over the next decade. And what it does is it enables us to reduce the debt and generate value for all our equity investors, but also importantly for the host companies. So just talking about '21, we've had a good start.
Operationally, we've just signed a contract with the best Ventura drilling rig. This is Kagana, and that is now mobilizing and we'll start drilling in q two, and I'll talk a little bit more about that. Other things, facility performance continues to be good. We're injecting over 200,000 barrels of water per day in Jubilee. You may remember at the Capital Markets Day, we talked about about a 180,000 barrels a day of injection through twenty months, so we're doing better than that.
And that helps you to maintain reservoir pressure. That helps stem production decline. Also, by maintaining reservoir pressure, we're able to then reduce the gas oil ratio, which also then helps with production. So water injection is quite an important thing. We've also had consistent gas off take from the the GNPC that's government of Ghana.
So that's running at about a 125,000,000 tonnes per day, and that's pretty much in line with the expectation. I think the production guidance we gave for '21, that reflected a couple of things. So that reflected the overall impact of the historic underinvestment in both Jubilee and Penn. That's something we replied that the capital markets say. In addition, the guidance also reflected that we now have a confirmed shutdown at Jubilee.
That's gonna be in in September ish time frame. So that's a complete shutdown, so that will impact production in the kind of five ish percentage. We also not even our partners. Franco, with the operator of Simba. We deferred the investment from '21 to '22.
So that had a a significant impact about 1,500 plus files a day net to us. And we had faster decline on in '29 than we expected. Fortunately, that's stabilized now. So so we're on a good footing for the '21. With the start of drilling in q two, we now see a pretty clear path to growing production and cash flows again.
Just to give you some more color, so we've got four wells planned for this year just given the timing. So that's we're looking to drill and complete four valves. Three of those will be in Jubilee, and one will be a gas injector in '10. And and just an important thing for this is I talked about the the production decline in in in '20. One of the factors was the absence of gas injection to support that production.
So so putting a gas injector there is certainly gonna help build, you know, the store production and and and stand the client. So now given the the timing of the drilling, so what we expect is of these four valves, you'll see only two of the wells will have a partial impact because you're gonna start drilling in q two. You're gonna have the first completion in q three. So you'll only have a partial impact of production this year. But importantly, they all contribute to production next year.
And, of course, we're now on a journey having created the kind of head headwind from the strong focus in cost that we have, high operating margins with the capital discipline. We're focusing capital on the high return steps, so we're a multi well of the year doing programs. So we expect to drill five drill with five wells next year. And again, the same thing is gonna happen. So the wells that are drilled early in the year will contribute obviously more, that are drilled less in the year will contribute less, but then they'll contribute in the following year.
And broadly speaking, what we expect then is that and again, this program is gonna be an asset. I think we said this at the Capital Markets Day, that is gonna be more heavily jubilee rated. So the implication of that is that you start to see in 2022 a restoration of production in jubilee, certainly above 2020 levels. And in '10, we're not gonna have many new guys. But certainly in '22, what we expect to see is the ability to hold the production flat relative to '21.
Right. So these are just broad sort of indicators. Obviously, over time, we'll give you more specific guidance. And and we and our kind of is the Central West Africa portfolio, we expect that to remain flat, obviously, once deducting the impact of the of the sale of that total domain and the support in the bond. So so I think we're we're pretty excited about that.
I think there's a clear path, strong operating base, and a clear path to to building the the production very much in line with the business plan that we set out in the Capital Markets Day. I also just wanted to say a few words, not a lot, but just a few words on the refinancing. So in the trading statement, you'll remember we provided a short update on the refinancing, and we have also announced that the redetermination, which is the process we go through with the ideal banks, which should be a plan for January 21, would be deferred by month. And I and I have many questions, so that's why I thought it'd be good to address that. And then if you'd lost it, so the was this linked to any major issues or anything sinister about this?
And whether all it has been to production guidance or whatever. But that's just just to be very clear, that's not the case. It's very simple. We just need a bit more time with the banks to run for the details of the new plan. And also, clearly, the introduction of these two deals that we announced today, that is a relevant impact with the injection of first time liquidity.
So that's that was the reason for the kind of additional time. Also, I think it's it's been reported in a lot of depth while perhaps in all that sort of stuff. So I just thought it'd be good to just be upfront and kind of share this with you guys so everybody's in the same same page. We were appointed advisers and lawyers as this is as part of the kind of debt refinancing discussions. And as have the lending banks and the bondholders, the twenty twenty one and the twenty twenty two bondholders.
So everybody's got and we're now in in constructive discussions with this entire group. Now, clearly, these are multiparty discussions. So and they're complex and they're interconditioned. So they will take some time, but we expect that we conclude these by q two of this year. So not not too long.
Just also I just wanna share with you, it's it's a it's a somewhat, you know, complex process. It's somewhat a great result. It'll be difficult for us to be a 100% transparent because also these are commercial negotiations. So we wouldn't be able to provide a kind of very detailed low by low commentary. I hope you understand that.
But we'll try and provide you updates as often as I can. So the next regulatory release we have is our full year results. Just bear with us because I don't want to make any promises on how much progress will have been made by them. But we'll certainly give you an update as we can. But the key point the key point I want you all to remember, and this is the message also that we we're conveying to our creditors and the banks, is that we had significant cash reserve.
This is a positive injection in liquidity. We've got a robust cash under the business, which has got a very clear path to deliver a net debt in the range of 1 to 1 and a half billion dollars and clearing at the lower end of the one to two times range. That's over the next one to five years. So the problem that we're trying to solve is the reprofiling of the debt to match the debt maturities with the timing of our cash. So that's the problem that we're trying to solve.
And that's the process that we're doing right now. We're educating everybody on this and then kind of, you know, getting everybody on the same same sort of page. So look. I mean, that's what we intended to cover. So I'm gonna stop now.
We'll take some questions. Let them know if you could help me with any questions that you would have. So, Jody, over to you. And to you, please.
Thank you very much, sir. Ladies and gentlemen, as a reminder, if Our first question for today is from James Hosie from Barclays. Please go ahead.
Hi, good morning. Thank you for your time. I just got a couple of questions from me on transactions. I mean, was this a competitive sales process? Were talking to other than Panora on these assets?
And then just on the contingent payments of any deal, like, can you provide a power view on the likelihood that the production targets are gonna be achieved, and where these assets where production growth was being assumed in the ten year plan you outlined late last year? Let me
handle let me let let guys describe kind of the the deal stuff. But there is clearly, there is there is CapEx associated with these assets. Like I said, roughly about 300,000,000 or so. So there is some growth obviously coming from that. The material growth change in the plan is really driven by the assets in Ghana.
So we don't really see this as having any material impact on the growth of the company. And as I just explained to you, we have this multi day program. So that's that's and and frankly, with the additional capital, you know, we can look to accelerate drilling in Ghana, for instance, and that's a lot more value to accretive from our perspective. But I'll let Lez answer the question on the on the deal process and structure.
Hey. Good morning, James. Hey. As you will recall, I mean, we received over the last while quite a series of inbound interest on our assets. And we took advantage of that inbound interest to also run competitive processes on each of those.
So yes, it has been tested competitively. And then on structure, yes, of course, we've we've adjusted the opposition to this so that they're deliverable. Now you can see there's quite a bit of detail in the update on both of those, how they're structured from a production all price point of view that we've certainly positioned in a way that we see them being eligible. And if you look at all prices, it's just been an example. We're already sitting today above the oil price that's included in the quicker.
So yes, is the short answer to both of those. So that's in a good position. Thanks, Mehul. Our
next question is from Matt Cooper from Peel Hunt.
So congratulations on the disposals. Three questions from me. So first one is, can I check what the total working capital adjustment to the headline prices for Equatorial Guinea and yourself in 2020? Second question is, do you think there's likely to be any tax payable in Gabon? And when do you expect Gabon government approval?
And then finally, given the disposals and also the improving oil price, are you now considering contracting a second rig in Ghana this year?
Thank you. So so, Matt, let me take your third question, and then Les can talk about the working capital and the and the and the tax. So I think, clearly, there is a tremendous amount of you know, mutual as you know, Don. Right? So and these assets, like I said, there's about $300,000,000 of additional sort of, you know, of CapEx that we can now redeploy.
So clearly, we're gonna think about how we accelerate on. I think we're encouraged by the old prices. But I think, you know, what we're excited about, frankly, is the underlying potential. So this certainly we were already contemplating affecting the the nothing that certainly kind of is very much part of that. We're gonna have we're gonna go through a process with our partners and and start to kinda see the timing of all of that.
But it's it's it's certainly under consideration, but we it'd be premature not to comment on timing of that. But as soon as we have definitive plans, we'll certainly share that with guys. But that's over to you on the working capital and the tax.
Perfect. Thank you. Thanks, Matt. On the working capital, let me because, of course, we don't know precisely when these deals are gonna complete. We're confident we're gonna complete in the first half.
If we assume for now, given we've got EG government approval, and it's not a long process within
Gabon.
So if we just, for the sake of argument, towards the
March, if you kind
of take account of the revenues and costs in the intervening period,
cash
would be in the region of $1.03 5 for the both transactions. The only adjustment that we would expect on top of that, assuming an end mark, would be our share of the transaction cost, which we've put in the release, which is 4 and a half million. And then our our transaction fees, which is all our advisers that we've used on the transaction, which in totality between two is about 8,000,000. So $1.03 5 give or take adjusted for 8. So that's the kind of 2020 on a cash impact.
Then on the second, we've we've seen the release which, again, we all mentioned that in the opening remarks, we've had very good collaboration and support from the EU government. So we actually do have in advance of signing, we've got all the necessary approval including confirmation that there's no tax due on the disposal. And we have the same conclusion and assumption on Gabon, and it's a thirty day process that's required for the Gabon government approval. As you can see, we're well positioned to move forward with completion in the first half of the year. Okay.
That's great. Thank you.
Our next question is from James Thompson from JPMorgan. Please go ahead.
Hi, Greg. Good morning. Thanks for the presentation. Just a couple of questions for me. In terms of the non operated production outlook, I mean, it looks like obviously Hibiscus is a decent amount of growth.
Could you perhaps point to the projects in the rest of the Lonoke portfolio that kind of replace that to keep production steady over the next ten years in the plan? Or is it really that we shift to Ghana an even greater shift to Ghana on a medium term basis? That would be the first question. And then the second one, in terms of the growth CapEx you talked about, Raul, is that really sort of next couple of years, front end loaded in 2022, 2023, given the implied ramp up on the assets in Gabon? Thanks.
So sort whether it's quite a big benefit from a CapEx perspective over the next couple of years, So know what
I think on the non op, James, big drivers that very much in the portfolio is cash flow because there's Phase four coming on that. And in Gabon, we have Simba, which is, as I said, we have been decent sort of contributor for '21, but that is deferred to 02/22. We're also just around Therabad, particularly in Gabon, we see additional sort of potential similar to what we saw with Symbol, which is opportunities to tie back to existing infrastructure. So that's something that's the team sort of continues to work on. But the two tangible projects are Simba and and Westpur.
I think in terms of your the CapEx impact, yes. I mean, I think we see broadly from at sort of $55 flat oil. These assets being cashed for you through for the first five years. So they you know, that sort of means that it's it's front end loaded, so that gives us the opportunity then to say, hey. Can we redeploy the CapEx to particularly to Ghana?
And I think as Matt had asked the question, then there is a consideration to Saba. Can we bring in the third rate? Sorry. Second. Okay.
Right. Probably so. Yeah.
Okay. Great. Thanks. And then just just on a on a technical basis, what's the rationale behind the different oil price assumptions in the contingent payments?
I'll let let him handle that.
As with all things, James is subject to negotiation and and processes that I laid out before. So it was not by design. It's just how these things play down. Okay. All right.
Thanks very much. I'll hand over.
Thank you very much. Our next question is from Mark Wilson from Jefferies. Please go ahead.
Hi, good morning guys. I'd like to ask, the press release outlines in quite some detail, once again, the Director's comments regarding uncertainty for your results and also repeated at interim results regarding covenant breaches and the potential liquidity shortfall over an eighteen month period. I just wondered if you could give us an update on where that uncertainty understanding ends now given we're in February 2021. Thank you.
So I think that thanks, Mark, for the question. I think what's very clear as we look at the business, right, is that we have a very robust plan, which is out in Capital Markets Day, and I just explained that we're very much on path to deliver that, and we can start to see with the with the start of investment program, the drilling, the recovery in production, and cash flow and things like that. So that's it. That's been done. I think point number two is that we now, through the various self help measures, we take a lot of cost out of the system.
And we also have, you know, to this asset and the Uganda, created really kind of, you know, real cash liquidity. And the problem that we're what we're trying to solve is one about kind of matching the maturity profiles to to cash flows. Now, till such time as so that's that's all very clear, I think you guys can put the math behind and can we can very much kinda see the see that. Till this time, as those things are not resolved, from a director point of view, we have to continue to state because there are covenants on the RDL, have forward looking liquidity tests and things like that. So till such time as those those maturity issues are aren't resolved, I think we are obligated to continue to put this these these these companies.
And as I said, we're on path now through the discussions that we started and instructed. We're certainly in paths to resolving this, you know, by q two. So I don't know, unless you wanna add further to to Mark's question and
No. Not not nothing to add. All we're doing right now is is seeking to address that to the discussions we're having.
Okay. Thank you. It
should have been one thing. The system.
Sorry, Mike. You're you're breaking out a little bit. I'm sorry.
Okay. Maturity timelines are are one thing against cash. Okay. And then what but also be restring options rather than just refinancing on the table because, you know, look at the where the equity is now versus the business plan you outlined, it really quite an equity upside versus bonds that are still trading quite at their usual level. Would you say that's on the table?
Sorry. I'm really sorry, Mark. I only got the part. Can I request you to say that one more time?
Okay. Let me try one more time. And the restructuring refinancing of the maturities is one thing, but I'd like to ask you if there's also restructuring of the traded bonds on the table as well, given that where we see the equity trading versus your business plan, there's quite some upside arguably within the equity, which we haven't really seen the bonds take any pressure from that. Would you say that's an option for the table as well?
So I think just to reiterate, well, firstly, I think the specifics of how we're looking to kind of refinance, I think that I would request you we kind of you know, we we have to get commercially sensitive. Right? But, you know, I I think the way we see it is very clear, which is that we've got significant cash reserves. This deal adds to that. We've got a cash under the business.
You've got a basic path to deliver lower debt. So we will be able to repay the debt, you know, and we have line of sight to say how you get to 1 to 1 and a half billion dollars. And importantly, to be in the sort of one to two, perhaps the lower end of the kind of, you know, net debt to EBITDA range. So that's there's a clear path to that, and that's assuming flat nominal prices of $55. Right?
So already that's looking a little bit sort of conservative. So discussions from our perspective really are about matching debt maturities to the timing of the cash flow. That's the problem we can solve. Our
next question today is from Rachel Fletcher from Morgan Stanley.
Good morning. Thanks for taking my question. Just one last from me, please, on the trading update the trading update side. It's on CapEx. In the trading update, you noted that CapEx guidance for 2021 is now, 265,000,000, which is lower than the 325,000,000 indicated at the Capital Markets Day.
Now I know some of this is from deferral of Cimber, and as I understand, some of it is, the optimization of spending in Ghana.
I was wondering whether you could talk
a little bit about, the latter, please. And then also, with the deferral of Cimba and the redeployed CapEx from this asset sale, should we now expect CapEx hunt in 2022, 2023?
Thanks. So I think you've said it well, Rachel. So the what we presented at at the the Capital Markets Day was still a work in progress. So we had, at that time, not finalized rig contracts. We had not finalized billing completion services contracts, and we had not finalized Jubilee Serve contract.
So so there was, you know, so what we had kinda shared with you guys, but at that time, what were our preliminaries for the budget. The numbers, there's a little bit of contingency between the the job working with the various contractors to bring costs down. So that was the so the optimization really was around, you know, better definition and also, you know, candidly, just a better job that people did on the kind of contract negotiation. So so I was quite pleased with that. That also speaks to a mindset and a culture change that we're putting in place, which is a lot more discipline about how we're spending our money.
I think in terms of kind of the longer term impact on or medium term impact, sorry, on CapEx, I think the we're not I don't wanna give guidance on 22 per se. But, clearly, we're we're we're very committed to the the current dividend, which is a multiyear, multiyear program. I think any acceleration will take time in the sense of that is about a year at least of of long lead stuff, and then also it takes time to get alignment with partners on program and things like that. So that's a very long way of saying. I don't see that in '22.
Certainly, I think, you know, an acceleration of CapEx would probably come in '23 realistically. But we're working through all of these things. So I I don't want to gonna give you any explicit guidance on that.
Our
next question is from Nick Stefano from Renaissance Capital.
Good morning, gentlemen. It's Samik Stefan from Renaissance Capital. Thank you for taking my questions. I've got two to ask if I may. The first one is on Jubilee.
I looked at the declines since August, and it looks like it's like a production drop by something like 20,000 bus per day in in four months, which is it's it's the first time as it is kind of like declines at Jubilee. I know you stated that it's it's in line with your expectations, but could you give me a bit more color? Is is that solely due to to pressure? Or is it have you seen like an increase in the water cut as well? And then the second question is is on the on the drilling for 2022.
You said five West. Is that more is it to convert two c to two p or is it, you know, a two p recovery and it could be it could give us like a split between the
the two p's that that that would
be helpful, please. Thank you.
Okay. So I I look at I'm not sure if I understood your numbers on the on the first one, but roughly, if you look at the beginning of the year on Jubilee and the and the end, we would have seen about a 24% decline through the year. Okay? And that for these sorts of of of fields, I mean, if you're not putting in new results, that is not unusual. Now remember that the way you manage so take it a little bit.
You have a tremendous amount of resource in place. Right? So you need a certain amount of drilling to keep adding well stock, and the more well stock that you have, the more you can optimize. So for example, I had a high get high high GR well, but I had that, you know, well stocked, which is a low GR well, so I can swap between the two. Right?
Or if I have a high water cut well, I can then switch over from that to a low water cut well. So you you need to have an excess well stocked to be able to manage that decline. And given that we had not drilled, we believe, for the last well we drilled, I think, was in June, That's just, you know, that that impact. And and I said this to the capital markets that we've been underinvesting these assets, it will come to haunt you. But the good news is that you can turn that around very quickly, and that's exactly what we did.
Right? So so that's the that's the idea. The mix, like I said, is that we have you know, we're drilling complete four wells this year, but then two will come in. So one will come in q three, another one back end of q three. So they'll have some contribution, but you won't see the impact, and that's in '21.
Right? And the other two wells will only complete towards the end of the year. Right? The '22, you start to see a a full impact of these. We prioritize, Nicholas, a lot of the infill wells.
And so those are gonna start to be so those would be it would be would be would be 2 p wells. I think we have a a pretty deep inventory of the of the two p. So I think we'll we'll build those out for quite some time. I don't have the exact breakdown, frankly. If I look at the program over the next few years, which is two c two p.
I don't we actually don't think about it that way. But I'm sure Chris and the guys can if we have disclosed it, I'm sure they can come back to you on that. But but it's a pretty well defined program, and and the debate kinda going beyond '22 is the department is really the mix between Jubilee and TAC.
Okay. Got it. Thank you. Okay.
Thank you very much. We apologize that we will not be able to take all of our questions for today. Our last one is from Alex Stanton from RBC. Please go ahead.
Yes. Good morning. It's Al. Can I just ask a couple of questions about the rest of the portfolio? When you're talking to your lenders and they ask you, what are you going to do about Kenya?
What do you say? And then also, I suppose, if they ask you what revenues are you going to get from the Ghanaian gas, what do you say about that as well?
Okay. Both good questions. So I think on Kenya, we've been pretty clear that this year really is about working with our partners in the government to see can we make the project viable and in a long term low price work. And I think then once we've done that, we will take a call as to what's the best way that has got to be funded. We've been pretty transparent that we, in the past, have looked at kind of far more stuff.
We haven't really said much to the government or our our banks necessarily about whether we wanna resume that process or not. I think the first really job, Alice, to figure out is the project viable or not. My my sense is that the project is viable. It's a tremendous resource. And if if the project is viable, I think we certainly, you know, can we find the right capital to come in and find out, you know, sure.
But, you know, we don't know that yet. So that's on on the on the on the Kenya piece. On Ghana, I think, as you know, Al, we have committed the foundation gas to the to the government of Ghana, so that's at no cost. That, I think, from memory, runs out sometime next year. We're in discussions right now with the government on a long term gas contract arrangement.
And and, you know, given the confidence we have in the resource and given the confidence we have in the operating performance, we've actually putting forward to them a proposal where we're saying that we're willing to put forward a ship or pay commitment if you're willing to do a take or pay. We can't disclose kind of pricing stuff and all that, but what I can say to you is in the value proposition that we would put forward to the government account, it would be very compelling. It would be the most compelling gap that they have. And they have a very clear vision, particularly with administration that's coming of driving a gas based economy towards industrialization. So we think we have a tremendous role to play and we will have the most competitive and the most reliable gas in government for the long term.
So that's sort of what
I can say. I'm not at this point at liberty to disclose kind of the actual numbers on the pricing discussion.
Okay. Can I just ask one follow-up on Kenya?
I mean, obviously, we've been through the bill on the oil price, but
are you under any pressure now that the oil price is at $60 to do something from perhaps the government?
No. I I mean, we were having you know, I think that what the government would like to see and and this is you know, they understand that if we reconfigure the project out and it's attractive and it's viable at $40, I think they understand. Mean, all prices are volatile. Right? So the 60 today doesn't you need to succeed for how much.
Right? And you're not going through many cycles. Right? So I think the mission that we have taken and did the support and used to make it viable at 40. And they know that if we do that, then, you know, we will be able to collectively attract the right capital.
So no, I think they're kind of aligned with us on the track. There is some bad interest as well. I mean, we're not there's no way that you're going to attract capital if the project is not viable.
Okay.
I think that was the last question. And again, big thanks to all of you for taking the time at relatively short notice here. And we will look forward to to speaking again in a month's time, I think, at the at the results. So take care.
Thank you very much, sir. Ladies and gentlemen, that does conclude the call for today. Thank you everyone for joining. You may now disconnect.