Tullow Oil completes pre-emption of Ghana assets for US$118M

GHANA – Tullow Oil, a multinational oil and gas exploration company 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 for US$118 million.

The transaction funded from cash on the balance sheet takes the equity interests of Tullow Oil to 38.9% in the Jubilee field and 54.9% in the TEN fields.

The transaction further adds c.5 thousand barrels of oil per day (tbopd) of unhedged daily production, bringing the company’s production to c.4 kbopd on an annualized basis.

Tullow Oil has reported that the additional equity is set to increase the oil producer’s capital expenditure forecast by US$30 million to US$380 million.

The company has noted an expected production of US$300 million in incremental free cash flow at US$75 per barrel of crude oil between 2022 and 2026.

The transaction will further increase Tullow Oil’s net 2P reserves by c.21 million barrels of oil (mmboe), amounting to a 9% gain.

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 Honourable Minister of Energy whose leadership has been paramount in getting to completion,” said Tullow Oil CEO Rahul Dhir.

This transaction underscores our confidence in the assets and meets our objectives of value accretion and deleveraging.”

In mid-October 2021, Occidental announced it would be selling its interests Jubilee and TEN for US$750 million to Kosmos Energy and the Ghana National Petroleum Corporation (GNPC).

The sale to Kosmos worth US$550 million, closed upon signing and the sale to GNPC, was expected to close in the fourth quarter of 2021.

But it wasn’t to be as Tullow exercised its right of pre-emption regarding the sale of Occidental’s interests in the two fields to Kosmos Energy the following month.

Kosmos also received notice that PetroSA intends to exercise pre-emption rights for the sale. But that process is still ongoing.

The Jubilee field straddles both the West Cape Three Points and Deepwater Tano (DWT) blocks in the Tano Basin offshore Ghana.

The first production from the Jubilee field came in late 2010 and from Tweneboa, Enyenra, and Ntomme (TEN) field in 2016.

Despite the pre-emption, Tullow Oil still remains behind its competitors, who are using the current market conditions to build infrastructure in green energy.

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