LONDON, UK: Tullow Oil plc has announced that its subsidiary, Tullow Oil Gabon S.A., has signed an asset swap agreement with Perenco Oil and Gas Gabon S.A. The deal is intended to optimise Tullow’s equity ownership across key fields in Gabon and simplify and equalise its ownership in these areas. The cashless asset swap will involve the exchange of participating interests held by both parties in certain licences in Gabon.

The agreement will enable Tullow to leverage its technical skills and focus on more material positions in key fields, streamlining processes and creating better alignment between participating interest partners.

The Tchatamba facilities will become a core hub for Tullow. Additionally, the deal will achieve a better balance between discovered resources and appraisal and exploration assets, with clear opportunities to maximise the value of the assets, in line with the Group’s infrastructure-led exploration (ILX) growth strategy.

The transaction will provide access to future growth through Tullow’s interest in the DE8 licence, where several ILX opportunities have been identified that could be tied into existing Tchatamba facilities.

Under the terms of the deal, Tullow Gabon will assign and transfer its existing percentage participating interests in the Limande, Turnix, Moba and Oba assets and part of its existing percentage of the Simba assets to Perenco. Perenco will assign and transfer part of its existing percentage participating interests in each of the Kowe (Tchatamba) and DE8 assets to Tullow Gabon, resulting in post-completion holdings of 40% for Tullow Gabon.

The transaction is expected to be completed by the end of 2023, subject to certain market-standard conditions precedent, including customary government and regulatory approvals. It will have no impact on Tullow’s liquidity headroom and the Group’s 2023 production guidance of 58,000 to 64,000 bopd and cash flow guidance of c.$200 million at $100/bbl remains unchanged.

Rahul Dhir, Chief Executive Officer of Tullow Oil plc, described the deal as an example of Tullow’s strategy in action, as it continues to take proactive steps to optimise its portfolio to focus on high return producing assets and growth opportunities around existing infrastructure.

Tullow Oil and Capricorn Energy agree on all share business combination