Tullow Oil plc (LON: TLW) announced Tuesday that the sale of its assets in Uganda to Total (NYSE: TOT) has now completed. Tullow Oil plc (LON: TLW) announced Tuesday that the sale of its assets in Uganda to Total (NYSE: TOT) has now completed.
The company said a $500 million consideration was received on Tuesday and noted that a further $75 million will be received when a final investment decision is taken on the development project. In addition, contingent payments linked to the oil price are payable after production commences, Tullow revealed.
The closing of the deal follows the satisfaction of all deal conditions, Tullow stated. These included the execution of the binding tax agreement, the approval for the transfer of Tullow’s interests to Total and the transfer of operatorship for Block 2. The completion of the transaction marks Tullow’s exit from its licenses in Uganda after 16 years of operations in the Lake Albert basin.
“The closing of our transaction with Total clearly evokes mixed emotions within Tullow,” Rahul Dhir, the chief executive officer of Tullow Oil, said in a company statement.
“While we are sad to be exiting Uganda after many years, the $575 million of proceeds form an important part of our plan to strengthen Tullow’s balance sheet and improve our financial position,” he added.
“We will watch the progress of Uganda’s oil and gas industry with much interest and all of us at Tullow wish the people and Government of Uganda and our former joint venture partners every good fortune as they take this important project forward,” Dhir continued.
Tullow revealed that it now has a net debt of $2.4 billion and available liquidity of $1 billion. Dhir and Les Wood, the company chief financial officer, are scheduled to lay out their plans for the business in the coming years at a capital markets day on November 25.
On April 23, Tullow announced that it had agreed the sale of its assets in Uganda to Total and that CNOOC had rights of pre-emption to acquire 50 percent of these assets on the same terms and conditions as Total. In May, CNOOC informed Tullow and Total that it had elected not to exercise its pre-emption rights. Last month, Tullow revealed that it had received government approval for the deal.
Tullow describes itself as a leading independent oil and gas, exploration and production group. The business has interests in over 70 exploration and production licenses […]