Tullow completes Occidental's sale of stakes in Jubilee and TEN Oil fields

Cash consideration paid on completion was $118 million

Tullow’s equity interests increase to 38.9% in Jubilee field

Tullow’s equity interests increase to 54.8% in TEN field

Tullow Oil PLC (Tullow) has announced that it has completed the pre-emption of the sale of Occidental Petroleum’s interests in the Jubilee and TEN fields in Ghana to Kosmos Energy.

According to a statement issued by the firm, it said, the cash consideration paid on completion was $118 million reflecting closing adjustments,

This, according to Tullow was funded from cash on the balance sheet.

Rahul Dhir, CEO of Tullow Oil PLC, stated, “I am delighted that this important transaction has been completed and I am grateful for the continued support of the Government of Ghana and, in particular, the Honourable Minister of Energy whose leadership has been paramount in getting to completion. This transaction underscores our confidence in the assets and meets our objectives of value accretion and deleveraging.”

This transaction takes Tullow’s equity interests to 38.9% in the Jubilee field and to 54.8% in the TEN fields and adds c.5 kbopd of unhedged daily production.

It equates to c.4 kbopd on an annualised basis and increases 2022 Group production guidance to 59-65 kbopd (30-32 kbopd at Jubilee, 13-14 kbopd at TEN and non-op portfolio unchanged at 16-19 kbopd).

Meanwhile, this additional equity increases Tullow’s 2022 Group capital expenditure forecast by $30 million to $380 million and is expected to generate c.$300 million incremental free cash flow at $75/bbl between 2022 and 2026.

As of 31 December 2021, the transaction increases Tullow’s net 2P reserves by c.21 mmboe (9%) and has an estimated post-tax NPV 10 valuation of $355 million at $75/bbl.