Tullow Oil PLC Tullow Pre-emption in Ghana (0719S)
11 Novembre 2021 - 08:00AM
UK Regulatory
TIDMTLW TIDMTTM TIDMTTM
RNS Number : 0719S
Tullow Oil PLC
11 November 2021
News Release
Tullow pre-emption of Deep Water Tano component of Kosmos
Energy/Occidental Petroleum Ghana transaction
11 November 2021 - Tullow Oil plc (Tullow) announces that it has
exercised its right of pre-emption related to the sale of
Occidental Petroleum's interests in the Jubilee and TEN fields in
Ghana to Kosmos Energy.
Pre-emption summary
- Tullow to pre-empt on Deep Water Tano (DWT) Block interest
indirectly acquired by Kosmos Energy
- Post completion, it is anticipated that Tullow's equity
interests will increase to 38.9% in the Jubilee field and to 54.8%
in the TEN fields
- The additional equity interests are expected to add c.10% to
daily Group production and the associated incremental cash flow
will help to accelerate Tullow's debt reduction
- The consideration is expected to be c.$150 million (if
pre-emption by other Joint Venture (JV) Partners is fully
exercised), which will be subject to closing adjustments
- Tullow will fund this transaction through existing resources
Rahul Dhir, CEO of Tullow Oil, commented today:
"This is a value accretive, self-funded opportunity for the
Group which will increase Tullow's daily Group production by c.10%
and generate additional cash flow to help accelerate debt
reduction. Increasing our operated stakes in the Jubilee and TEN
fields underscores our commitment to investing in and delivering
our Ghana Value Maximisation Plan. This opportunity fits well with
our strategy to focus on maximizing value from our producing
assets. We look forward to constructive conversations with our JV
Partners and the Government of Ghana as we finalise the
transaction."
Assets being acquired
As per the DWT Joint Operating Agreement (JOA), Tullow has
pre-emption rights in respect of the 11.05% participating interest
within the offshore DWT Block acquired by Kosmos Energy as a result
of its acquisition of Anadarko WCTP Company announced on 13 October
2021. Tullow has exercised its right of pre-emption over this
participating interest in DWT and assuming all JV Partners also
fully exercise their pre-emption rights, this would increase
Tullow's share in the Block by 7.7% (to a total of 54.8%). This
would in turn increase Tullow's equity interests in the Jubilee and
TEN fields to 38.9% and 54.8%, respectively.
Consideration
The consideration for the 7.7% increase in equity would be
c.$150 million with an economic effective date of 1 April 2021,
subject to concluding definitive agreements and closing
adjustments. The purchase of the participating interest in the DWT
Block will be funded from Tullow's existing resources.
Strategic and financial impact
Increasing exposure to these assets is aligned with Tullow's
strategy to focus on its producing assets. The additional equity is
expected to increase Group daily production by c.10% and generate
over $250 million incremental free cash flow at $65/bbl for Tullow
between 2022 and 2026, which will help to accelerate debt
reduction.
As of 30 June 2021, based on Tullow's reported Half Year 2021
Reserves Report, the 7.7% additional equity would increase Tullow's
net 2P reserves by approximately 21 mmboe and has an estimated
post-tax NPV 10 valuation of $347 million.
Next steps and approvals
Completion of the transaction remains subject to finalising
definitive agreements with Kosmos Energy/Anadarko WCTP Company and
gaining approval from the Government of Ghana consistent with the
agreed Kosmos/Occidental transaction. Tullow will update the market
accordingly as these discussions progress.
Further information
In the event that both Kosmos Energy Ghana HC and Petro SA do
not pre-empt, Tullow would pre-empt the entire participating
interest which would increase Tullow's equity in the DWT block by
11.05%. The consideration to be paid by Tullow in this event would
be c.$206 million, subject to closing adjustments.
Based on Tullow's Full Year 2020 financial accounts, the loss
before tax attributable to the acquired assets would be $30 million
and based on Tullow's interim results as 30 June 2021 the gross
asset value of the acquired interests would be $755 million. These
figures have been extracted from the Tullow Oil plc consolidated
financial statements and pro-rated for an additional equity
interest of 11.05% in the DWT Block.
FOR FURTHER INFORMATION CONTACT:
Tullow Oil plc Murray Consultants
(London) (Dublin)
(+44 20 3249 (+353 1
9000) 498 0300)
George Cazenove Pat Walsh
(Media) Joe Heron
Nicola Rogers
Matthew Evans
(Investors)
This announcement contains inside information for the purposes
of Article 7 of Regulation 2014/596/EU which is part of domestic UK
law pursuant to the Market Abuse (Amendment) (EU Exit) Regulations
(SI 2019/310) ("UK MAR"). Upon the publication of this
announcement, this inside information (as defined in UK MAR) is now
considered to be in the public domain. This announcement is being
made on behalf of Tullow by Adam Holland, Company Secretary.
Notes to Editors
Tullow is an independent oil & gas, exploration and
production group which is quoted on the London, Irish and Ghanaian
stock exchanges (symbol: TLW). The Group has interests in over 40
exploration and production licences across 11 countries including
Ghana where it operates the Jubilee and TEN fields. In March 2021,
Tullow committed to becoming Net Zero on its Scope 1 and 2
emissions by 2030.
Follow Tullow on:
Twitter: www.twitter.com/TullowOilplc
YouTube: www.youtube.com/TullowOilplc
Facebook: www.facebook.com/TullowOilplc
LinkedIn: www.linkedin.com/company/Tullow-Oil
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