TIDMTLW
RNS Number : 9220I
Tullow Oil PLC
10 August 2023
TULLOW OIL PLC
Guyana update
10 August 2023 - Tullow Oil Plc ("Tullow") is pleased to
announce that it has agreed to sell its total interest in Tullow
Guyana B.V. ("TGBV"), which includes the Orinduik licence (Tullow
60% operated equity) in Guyana to Eco Guyana Oil and Gas (Barbados)
Limited ("Eco") (the "Transaction") in exchange for a combination
of upfront cash and contingent consideration.
Tullow's decision to exit the Orinduik licence is in line with
its strategy to focus on its high return production assets in
Africa and infrastructure-led exploration around producing hubs and
delivers its objective to unlock value in emerging basins. In 2019,
Tullow drilled two exploration wells on the Orinduik licence which
yielded uncommercial oil discoveries. Nonetheless, Tullow
recognises the material oil resource potential remaining in the
Orinduik licence and as such, the terms of the Transaction allow
Tullow to retain exposure to any potential future success in the
region.
Transaction summary:
- US$700,000 cash payment upon transfer of TGBV's 60% equity and
operatorship of the Orinduik licence to Eco, to be paid to Tullow
Overseas Holdings B.V. ("TOHBV") on completion of the Transaction
(the "Initial Consideration").
- Contingent consideration is payable to TOHBV, which is linked
to a series of potential future milestones and triggered as
follows:
o US$4 million in the event of a commercial discovery
o US$10 million payment upon the issuance of a production
licence from the Government of Guyana
o Royalty payments on future production - 1.75% of the 60%
working interest entitlement revenue net of capital expenditure and
lifting costs
- Transaction and payment of the Initial Consideration outlined above is subject to certain market-standard conditions precedent, including Government and JV approvals.
- Proceeds from this transaction will be put towards general corporate purposes.
- Completion is expected to occur in the second half of 2023.
Jean-Medard Madama, Director Exploration, Non-Operated Assets
and Decommissioning, commented today:
"This transaction is in line with our strategy to optimise our
portfolio through opportunities to unlock value from our emerging
basin licences, whilst focusing our capital expenditure on our high
return producing assets and growth opportunities around existing
infrastructure."
CONTACTS
Tullow Oil plc (Investors) Camarco (Media)
(London) (London)
ir@tullowoil.com (+44 20 3757 4986)
Nicola Rogers Billy Clegg
Matthew Evans Georgia Edmonds
Rebecca Waterworth
=========================== ====================
Transaction Structure
TOHBV has signed a sale and purchase agreement (the "SPA") with
Eco for the transfer of its entire interest in the Orinduik licence
via the corporate sale of TGBV to Eco in exchange for a mix of cash
and a series of contingent payments based on future milestones.
Pursuant to the SPA, TOHBV has agreed to transfer to Eco for
cash consideration TOHBV's entire shareholding in TGBV. TGBV holds
an undivided 60% participating interest and Operatorship in and
under (i) a petroleum agreement between the Minister responsible
for Petroleum representing the Government of the Co-operative
Republic of Guyana, Eco (Atlantic) Guyana Inc. and TGBV dated 14
January 2016 (as amended from time to time) (the "PA") and (ii) the
joint operating agreement dated between TGBV, Eco (Atlantic) Guyana
Inc., and TOQAP dated 18 January 2016 (as amended from time to
time).
Additional cash consideration may be received by TOHBV from Eco
and any successors, in the form of contingent payments, which will
be payable on upstream revenues in the form of royalty payments
will become due and payable to TOHBV once upstream revenues from
the Orinduik licence commences.
Subject to the satisfaction of certain market standard
conditions precedent, including Government and JV approvals, the
Transaction is expected to complete in the second half of 2023.
Additional information
The Transaction is classified as a Class 2 transaction as
defined by Chapter 10 of the Listing Rules and is therefore not
conditional on the approval of Tullow's shareholders.
On 31 December 2022, the gross asset value attributable to the
Transferred Interests subject to the Transaction amounted to $1.5
million as per the audited TGBV financial statements. As of 31
December 2022, the gross 2C resource attributable to the
Transferred Interests amounted to 47.7mmbbls.
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). The Group has interests in over 30
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
PROSPECTUS OR EQUIVALENT DOCUMENT AND PROSPECTIVE INVESTORS SHOULD
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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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