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LONDON - Tullow Oil (LON:TLW) plc announced Monday that it has signed a sale and purchase agreement with Gulf Energy Ltd for the sale of its entire Kenyan portfolio for a minimum cash consideration of $120 million.
The transaction involves Tullow Overseas Holdings BV selling 100% of shares in Tullow Kenya BV, which holds Tullow’s entire working interests in Kenya, representing approximately 463 million barrels of 2C resources.
The consideration will be structured in three tranches: $40 million payable upon completion, expected in the third quarter of 2025; $40 million due at the earlier of Field Development Plan approval or June 30, 2026; and $40 million payable over five years from the third quarter of 2028 onwards.
In addition to the cash consideration, Tullow will be entitled to royalty payments subject to certain conditions and will retain a no-cost back-in right for a 30% participation in potential future development phases. This right can be exercised if a third-party investor participates in future development phases.
"The transaction supports our strategic priority to strengthen the balance sheet, with the first two payments totalling $80 million expected before the end of the year," said Richard Miller, Chief Financial Officer and Interim Chief Executive Officer of Tullow.
The sale is part of Tullow’s broader strategy to focus on high-margin, self-funded production assets with strong cash flows. Along with the recently announced $300 million sale of its Gabonese assets, the company expects to receive combined proceeds of $380 million in 2025.
The transaction requires approval from the Competition Authority of Kenya and implementation of a plan to achieve physical and functional separation of Tullow Kenya from the Tullow group.
All past and future decommissioning and environmental liabilities associated with the Kenyan assets will be transferred to the purchaser as part of the transaction.
The announcement was made based on a company press release.
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