Tullow Oil expects to raise production by at least 24 per cent this year, boosted by additional capacity in Africa and Asia and the acquisition of Australian rival Hardman Resources.

Tom Hickey, Tullow's finance director, said yesterday that production should average about 80,000 barrels of oil equivalent per day (boepd) this year and reach 85,000 by the end of the year. This compares with an average of 64,720 boepd during 2006, the company said yesterday in a trading statement.

In 2007, the company plans to drill more than 20 exploration wells, with a particular focus on Uganda, Namibia and India. Last year it drilled 12 exploration wells, seven of which discovered hydrocarbons. During the year it also won seven new exploration licences and expects to add to that again this year.

At the end of last year, Tullow completed its €865 million acquisition of Hardman Resources, leaving the group with an additional 4,000 boepd. Mr Hickey said he expects this resource, which comes from the Chinghetti oil field in Mauritania, to increase by another 1,000 or 1,500 boepd by the end of the year.

Average oil prices achieved during 2006 were "significantly higher" than in 2005. Mr Hickey said he was not concerned about the volatility in prices seen in the latter part of 2006 as he believes British gas prices and oil prices globally will rise again this year and next.

During 2006, Tullow invested about £330 million (€498 million) in development and exploration activities, a figure the group expects will rise to £370 million this year.

The highlights this year are expected to be a clearer picture of the size and quality of the group's acreage in Uganda, Mr Hickey said.

Analysts were generally positive on the outlook for the group, though they said a lack of new news in yesterday's trading update had provided little reason to trade the shares. As a result, the stock fell in line with markets. One analyst expressed disappointment the 2007 production forecast was not higher.