EnergyFeatured

Tullow announces Equatorial Guinea SPAs

TULLOW Oil says it has signed two separate sale and purchase agreements (SPAs) with Panoro Energy for all of Tullow’s assets in Equatorial Guinea (the EG Transaction) and the Dussafu asset in Gabon (the Dussafu Transaction).

Transaction highlights include $180 million asset sales consisting of up to $105 million for the EG Transaction, up to $70 million for the Dussafu Transaction and a further $5 million consideration to be paid after both transactions have completed. EG Transaction: $89 million upfront cash consideration subject to customary completion adjustments; contingent cash payments of up to $16 million linked to asset performance and oil price.

The Dussafu Transaction entails $46 million upfront cash consideration subject to customary completion adjustments; contingent cash payments of up to $24 million linked to asset performance and oil price. Sale of c. 6,000 barrels per day (bpd) of 2021 production and c. 20 million barrels of 2P reserves, with an effective date of 1 July 2020. The Government of Equatorial Guinea has approved the EG Transaction and confirmed that no tax arises on the disposal. Completion of both transactions and receipt of funds is expected in the first half of 2021.

These are all value accretive transactions, which further strengthen the balance sheet and are in line with Tullow’s strategy of focusing on high-margin, self-funded production with strong cash flows. These transactions will have a neutral impact on the group’s 2021 operating cash flow at $50 per barrel and increase Tullow’s 2021 pre-financing free cash flow by  $0.1bn.

 

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button