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RNS Number : 7841X
Tullow Oil PLC
28 April 2023
TULLOW OIL PLC
Tullow signs asset swap agreement with Perenco to optimise Gabon
portfolio
28 April 2023 - Tullow Oil plc (Tullow) is pleased to announce
that, via its subsidiary, Tullow Oil Gabon S.A. (Tullow Gabon), it
has signed an asset swap agreement with Perenco Oil and Gas Gabon
S.A. (Perenco). This is intended to optimise Tullow's equity
ownership across key fields in Gabon and will be achieved through a
cashless asset swap involving the proposed exchange of
participating interests held by both parties in certain licences in
Gabon (the Transaction).
Transaction Highlights
-- Simplifies and equalises Tullow's equity ownership across key
fields in Gabon, creating better alignment between the
participating interest partners and streamlining processes.
-- Enables Tullow to leverage its technical skills and focus on
more material positions in key fields and places the Tchatamba
facilities as a core hub for Tullow.
-- Achieves an improved portfolio 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.
-- Provides 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.
-- Assignment and transfer by Tullow Gabon of 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.
-- Assignment and transfer by Perenco of 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 (see table below).
-- Tullow's 2023 Group production guidance of 58,000 to 64,000
bopd and cash flow guidance of c.$200 million at $100/bbl remains
unchanged.
-- Nil consideration transaction with no impact on Tullow's liquidity headroom.
-- The Transaction is subject to certain market-standard
conditions precedent, including customary government and regulatory
approvals.
-- Completion of the Transaction is expected by the end of 2023
with an economic date of 1 February 2023.
Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented
today:
"This deal is an example of Tullow's strategy in action as we
continue to take proactive steps to optimise our portfolio to focus
on high return producing assets and growth opportunities around
existing infrastructure. Our Gabon assets are a valuable and
important part of our asset base, and this transaction enhances our
exposure to preferred fields. We look forward to working closely
with our Partner to maximise their full potential."
CONTACTS
Tullow Oil plc Camarco
(London) (London)
(+44 20 3249 9000) (+44 20 3781 9244)
Nicola Rogers Billy Clegg
Matthew Evans Georgia Edmonds
Rebecca Waterworth
==================== ====================
Transaction Structure and Rationale
Tullow's wholly-owned subsidiary, Tullow Oil Gabon S.A., has
signed an asset swap agreement with Perenco Oil and Gas Gabon S.A.
(the Asset Swap Agreement), pursuant to which each of the parties
thereto has agreed to assign and transfer certain existing
participating interests held by it in specified Gabonese assets to
the other in exchange for the assignment and transfer of certain
participating interests to it in return, with an economic date of 1
February 2023.
Under the Asset Swap Agreement, Tullow Gabon has agreed to
assign and transfer certain of its existing participating
interests, at the date of the Asset Swap Agreement, in respect of
the Limande, Turnix, Moba, Oba and Simba assets (the Tullow
Transferred Interests) to Perenco in exchange for the assignment
and transfer by Perenco of certain of its existing participating
interests, at the date of the Asset Swap Agreement, in respect of
the Kowe and DE8 assets (the Perenco Transferred Interests) to
Tullow (the Tullow Transferred Interests and the Perenco
Transferred Interests together, the Transferred Interests).
The Transaction is aligned with Tullow's strategy of maximising
the value of our key producing assets and our Infrastructure-led
exploration (ILX) growth strategy of low-risk exploration and
appraisal around existing infrastructure.
The rationale for the Transaction is the simplification of
Tullow's equity ownership across key fields in Gabon, creating
better alignment between the participating interest partners and
streamlining processes such as budgeting, cost management and
capital allocation. The revised portfolio of assets will enable
Tullow to leverage its technical skills and focus on more material
positions in key fields.
The Transaction will also achieve an improved balance between
discovered resources, appraisal and exploration through the
following:
-- Providing Tullow with a stronger position in the Kowe licence
that contains the Tchatamba infrastructure which will support
potential future developments including the recent Tchatamba
TCTS-B14 ILX (Wamba) discovery, as well as the DE8 and Simba
fields.
-- Maintaining a strong position in the Simba licence where
several low-risk and compelling ILX investment options adjacent to
infrastructure have been high-graded for near-term drilling
programmes.
-- Provides Tullow with greater access to future growth
prospects through an increased stake in the DE8 licence where
appraisal drilling on the Akoum B discovery is currently under way,
with potential to deliver oil production through Tchatamba
infrastructure before the end of 2023. In addition, several ILX
opportunities, have been identified for future drilling
programmes.
An associated outcome of the Transaction is that production from
Tullow's retained assets will be entirely Rabi light blend crude
following the disposal of Limande and Turnix fields (both of which
are Mandji blend).
The exchange of the Transferred Interests as between the parties
will be deemed for all purposes to be made with effect from the
economic date. Due to the neutrality of the Transaction, no
additional consideration is payable by either party in respect
thereof. The Asset Swap Agreement includes provisions to ensure the
neutrality of the Transaction via cash adjustments for the period
between signing and completion.
Subject to the satisfaction of certain market standard
conditions precedent, including customary governmental and
regulatory approvals, the Transaction is expected to complete by
the end of 2023.
Information on the Transferred Interests
-- Proposed changes to Tullow's equity ownership by field:
Field Current Post-Transaction
================== ======== =================
Kowe (Tchatamba) 25.0% 40.0%
================== ======== =================
DE8 20.0%* 40.0%*
Simba 57.5% 40.0%
================== ======== =================
Limande 40.0% 0
Turnix 27.5% 0
================== ======== =================
Moba 24.3% 0
Oba 10.0% 0
================== ======== =================
*Tullow Gabon signed a SPA with Perenco Gabon for a 20% equity
interest in the DE8 licence in the first quarter of 2023.The
increase to 40% equity interest is subject to the closing the
initial DE8 SPA.
Under the UK Listing Rules, the Transaction is classified as a
Class 2 transaction and is therefore not conditional on the
approval of Tullow's shareholders.
Although this is a cashless asset swap and therefore represents
a neutral transaction for both parties, the Class 2 classification
of the Transaction requires Tullow to state the value of the gross
assets and profits attributable to the assets, which are the
subject of the Transaction. On 31 December 2022, the aggregated
gross asset value attributable to the equity interest of the assets
subject to the Transaction amounted to $120 million, as per
Tullow's 2022 Annual Report and Accounts. The aggregated value of
net pre-tax profit attributable to the equity interest of the
assets subject to the Transaction amounted to $115 million for the
year ended 31 December 2022, as per Tullow's 2022 Annual Report and
Accounts. As DE8 is not a producing licence, Tullow has assumed no
net pre-tax profits for the purpose of this disclosure.
Notes to editors
Tullow is an independent oil & gas, exploration and
production group which is quoted on the London and Ghanaian stock
exchanges (symbol: TLW) and is a constituent of the FTSE250 index.
The Group has interests in over 30 exploration and production
licences across eight countries. In March 2021, Tullow committed to
becoming Net Zero on its Scope 1 and 2 emissions by 2030. For
further information, please refer to our website at
www.tullowoil.com .
Follow Tullow on:
Twitter: www.twitter.com/TullowOilplc
YouTube: www.youtube.com/TullowOilplc
Facebook: www.facebook.com/TullowOilplc
LinkedIn: www.linkedin.com/company/Tullow-Oil
THIS ANNOUNCEMENT IS AN ANNOUNCEMENT AND NOT A CIRCULAR OR
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No statement in this announcement is intended as a profit
forecast or profit estimate.
This announcement includes statements that are, or may deemed to
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END
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