LONDON: Tullow Oil plc announced that the sale of its assets in Uganda to Total has completed with $500 million consideration received earlier today.
Tullow is also due to receive a further $75 million when a Final Investment Decision is taken on the development project plus contingent payments linked to the oil price payable after production commences.
The closing of this transaction follows the satisfaction of all deal conditions, announced on 21 October 2020, which included the execution of the binding Tax Agreement, the approval for the transfer of Tullow’s interests to Total and the transfer of operatorship for Block 2.
Although Tullow will retain a financial link to the development project through the potential contingent payments, the closing of this transaction marks Tullow’s exit from its licences in Uganda after 16 years of operations in the Lake Albert basin.
Tullow now has net debt of $2.4 billion and available liquidity of $1 billion. Rahul Dhir, CEO, and Les Wood, CFO, will lay out their plans for the Group in the coming years at a Capital Markets Day on 25 November 2020.
Rahul Dhir, Chief Executive Officer of Tullow Oil Plc, commented today: “The closing of our transaction with Total clearly evokes mixed emotions within Tullow. While we are sad to be exiting Uganda after many years, the $575 million of proceeds form an important part of our plan to strengthen Tullow’s balance sheet and improve our financial position. We will watch the progress of Uganda’s oil & gas industry with much interest and all of us at Tullow wish the people and Government of Uganda and our former Joint Venture Partners every good fortune as they take this important project forward.”
Tullow entered Uganda in 2004 through the acquisition of Energy Africa and in 2006, the Group made major discoveries at the Mputa-1, Waraga-1 and Kingsfisher-1 wells. This was followed by the acquisition of more licences through the purchase of Hardman Resources in 2007 and further discoveries in the Butiaba area in 2008 and at Jobi-Rii, the largest discovery in Uganda, in 2009. In 2012, Tullow sold 66.6% of its interests in Uganda to Total and CNOOC for $2.9 billion.
Tullow is an independent oil and gas, exploration and production group, quoted on the London, Irish and Ghanaian stock exchanges (symbol: TLW). The Group has interests in over 70 exploration and production licences across 15 countries.