Tullow Oil plc says it has completed the pre-emption related to the sale of Occidental Petroleum’s interests in the Jubilee and TEN fields in Ghana to Kosmos Energy.
The cash consideration paid on completion was US$118 million, reflecting closing adjustments, and was funded from cash on the balance sheet.
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.
This 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).
This additional equity increases Tullow’s 2022 Group capital expenditure forecast by US$30 million to US$380 million and is expected to generate US$300 million incremental free cash flow at US$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.
Rahul Dhir, CEO of Tullow Oil plc, said “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 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.”