U.S.-based Kosmos Energy said it is in early preliminary discussions to potentially buy Tullow Oil in an all-share transaction that could create an oil producer focused on Africa.
“There can be no certainty that any offer will be made, nor as to the terms on which any offer might be made,” Kosmos Energy said, confirming an earlier statement from Tullow Oil that it had been approached for talks by Kosmos.
The U.S.-based oil and gas company reserves the right to vary the form and/or mix of the offer consideration and vary the transaction structure, it said.
Apart from focusing on the U.S. Gulf of Mexico, Kosmos Energy has oil production and exploration assets in proven basins offshore Ghana and Equatorial Guinea, as well as a gas development offshore Mauritania and Senegal.
Kosmos is a project partner of supermajor BP in developing the Greater Tortue Ahmeyim Phase 1 project, which will use a floating liquefied natural gas (FLNG) vessel to produce LNG from the massive natural gas find offshore Mauritania and Senegal in West Africa made in 2015.
Tullow Oil, for its part, is focused on oil and gas developments in Africa and has seen several setbacks with operations and issues at some of its key oil and gas developments in the continent.
Tullow Oil has seen setbacks in its development plans in East Africa, where the Kenyan government rejected this summer the company’s plan to develop the South Lokichar project in Kenya.
This year, Tullow Oil more than doubled its profit after tax for the first half of 2024 amid higher oil and gas production and increased crude oil realizations. Tullow Oil said it expects “a significant free cash flow uplift” in the second half of 2024. Full-year free cash flow guidance was reiterated at $200 million -$300 million at $80 per barrel oil price.
