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LONDON - Tullow Oil (LON:TLW) plc has agreed to sell its entire Kenyan holdings to Gulf Energy Ltd for a minimum of $120 million, marking a strategic move to accelerate its deleveraging process. The sale, announced Today, involves Tullow’s subsidiary Tullow Kenya BV, which encompasses the company’s working interests in the region.
The payment structure includes an initial $40 million upon completion of the transaction, another $40 million by the earlier of Field Development Plan approval or June 30, 2026, and the final $40 million spread over five years starting in the third quarter of 2028. The agreement also stipulates royalty payments under certain conditions and grants Tullow a back-in right for 30% participation in potential future development phases without cost.
This transaction is considered significant under the UK Listing Rules and is subject to regulatory approvals and the delivery of payment guarantees. Tullow anticipates the full sale and purchase agreement to be finalized in the coming months, with the deal’s completion and the first payment expected within 2025.
Richard Miller, Tullow’s Chief Financial Officer and Interim Chief Executive Officer, expressed confidence in the transaction’s positive impact on Tullow’s financial position and its potential benefits for Kenya. The sale follows Tullow’s recent $300 million disposal of assets in Gabon, further strengthening the company’s refinancing efforts.
Gulf Energy, the buyer, is a prominent Kenyan energy and infrastructure group with significant involvement in the regional petroleum supply chain. Their expertise is expected to advance the development of the assets acquired.
The transaction is a continuation of Tullow’s strategic shift, focusing on its West African assets in Ghana, Gabon, and Côte d’Ivoire, while maintaining its commitment to responsible energy development and a net-zero emissions target by 2030.
This news is based on a press release statement from Tullow Oil plc.
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