Tullow Oil plc (Tullow) is pleased to announce that it has signed a binding heads of terms agreement with Gabon Oil Company for the sale of Tullow Oil Gabon SA, which holds 100% of Tullow’s working interests in Gabon for cash consideration of $300 million net of tax (the “Transaction”).
This disposal of a portfolio of non-core assets is accretive to both equity and leverage and accelerates the deleveraging process as referred to in our January Trading Statement and Operational Update.
This Transaction will constitute a significant transaction for the purposes of UKLR 7 of the UK Listing Rules (as came into effect on 29 July 2024). Further announcements will be made in due course upon full form transaction documentation being entered into by the parties.
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.
- Conditions precedent for the completion of the Transaction include all necessary approvals (including from government ministries), CEMAC Competition Commission approval and Tullow’s processing of the 2024 dividend in compliance with Gabonese requirements.
- Completion of the Transaction and receipt of funds is expected around the middle of year.
Richard Miller, Chief Financial Officer and Interim Chief Executive Officer of Tullow, commented:
“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.”