Tullow Oil agrees preliminary phrases for $120m Kenyan asset sale

Tullow Oil has reached an settlement to divest its Kenyan subsidiary, Tullow Kenya, to Gulf Power for a minimal consideration of $120m (£90.48m).

The deal was signed by its personal subsidiary Tullow Abroad Holdings.

The transaction’s fee construction contains an preliminary $40m upon completion, one other $40m due by 30 June 2026, or with the approval of the sphere improvement plan, whichever comes first, and the ultimate $40m to be paid over 5 years, ranging from the third quarter of 2028.

Moreover, Tullow retains the proper to a royalty fee, contingent on sure situations, and a back-in choice for a 30% stake in any future improvement phases for free of charge.

This deal shouldn’t be solely accretive to Tullow’s fairness and leverage metrics but additionally expedites the corporate’s deleveraging efforts.

This transaction can be categorised as a major transaction below the UK Itemizing Guidelines (UKLR), particularly UKLR 7 as up to date on 29 July 2024 .

Tullow interim chief govt officer and chief monetary officer Richard Miller mentioned: “Right this moment’s announcement marks one other step ahead in Tullow’s accelerated deleveraging journey with near-term money receipts of $80m and mitigating vital capital publicity, while retaining a cloth choice on the long run improvement of the challenge. I’m assured that the proceeds from this transaction, coupled with the $300m from the disposal of our belongings in Gabon, place the enterprise strongly for a profitable refinancing.

“We look ahead to working with Gulf Power, who’ve the requisite financing to finish the transaction and are a robust and credible counterparty, and by doing so, unlock materials worth for the individuals of Kenya.”

Final month, Tullow Oil agreed to promote its Gabon belongings to Gabon Oil Firm for $300m, internet of tax.

The deal encompasses Tullow’s Gabonese belongings, that are anticipated to supply 10,000 barrels of oil per day by 2025 and embody round 36 million barrels of confirmed reserves.

“Tullow Oil agrees preliminary phrases for $120m Kenyan asset sale” was initially created and printed by Offshore Expertise, a GlobalData owned model.

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