In order to sell Tullow Oil Gabon SA, which owns all of Tullow’s business interests in Gabon, for $300 million net of taxes, Tullow Oil plc (Tullow) has announced that it has signed a legally binding heads of terms agreement with Gabon Oil Company (the “Transaction”).
As mentioned in the company’s January Trading Statement and Operational Update, the sale of a portfolio of non-core assets accelerates the deleveraging process and is accretive to both equity and leverage.
According to UKLR 7 of the UK Listing Rules, which went into effect on July 29, 2024, this transaction will be considered substantial.
The company states that after the parties have signed full form transaction documents, more announcements will be made when the time is right.
Transaction highlights:
• Total cash consideration payable of $300 million net of tax.
• Corporate sale of Tullow’s entire Gabonese portfolio of assets, representing c.10 kbopd of 2025 production guidance and c.36 million barrels of 2P reserves (independently audited at year end 2024).
• Effective date for the Transaction is 1 January 2025.
• On a pro forma basis the Transaction will reduce Tullow’s net debt to $1.15 billion, as of the effective date.
• Entering into the full sale and purchase agreement (SPA) is targeted for the second quarter of 2025.
The CEMAC Competition Commission’s permission, all required approvals (including from government ministries), and Tullow processing the 2024 dividend in accordance with Gabonese regulations are prerequisites for the transaction’s conclusion.
It is anticipated that the transaction will be completed and the monies will be received in the middle of the year.
Meanwhile, Richard Miller, Tullow’s interim CEO and chief financial officer, said the following:
“This value accretive transaction with Gabon Oil Company (GOC) aligns with our strategic priorities to materially accelerate deleveraging and is an important step as we progress our refinancing plans this year. Together with GOC, we are focussed on finalising the full suite of documentation and driving the transaction to swift completion.
“Our strengthened balance sheet, repayment of our 2025 senior notes and imminent return to drilling at Jubilee, combined with production optimisation activities in the first quarter of 2025, demonstrates our continued delivery against our business objectives and positions the Company strongly for the year ahead.”
Through responsible oil and gas development in Africa, Tullow, an independent energy firm, is creating a better future. In addition to a material resource base that was identified in Kenya, the company’s operations are concentrated on its West African producing assets in Ghana, Gabon, and Côte d’Ivoire.
Gold-for-Oil Program Has Incurred Unspecified Losses, Leading To Its Suspension
Tullow has a Shared Prosperity policy that provides long-term socioeconomic advantages for its host countries, and it is dedicated to achieving Net Zero on its Scope 1 and 2 emissions by 2030. Both the Ghanaian and London stock markets quote the Group (symbol: TLW).
