Tullow Sells Gabon and Equa G Assets to Panoro

Wednesday, February 10, 2021

Tullow Oil plc announced that it has signed two separate sale and purchase agreements with Panoro Energy ASA (Panoro) for all of Tullow’s assets in Equatorial Guinea (the EG Transaction) and the Dussafu asset in Gabon (the Dussafu Transaction).

Transaction Highlights

US$180 million asset sales consisting of up to US$105 million for the EG Transaction, up to US$70 million for the Dussafu Transaction and a further US$5 million consideration to be paid after both transactions have completed.
EG Transaction: US$89 million upfront cash consideration subject to customary completion adjustments; contingent cash payments of up to US$16 million linked to asset performance and oil price.
Dussafu Transaction: US$46 million upfront cash consideration subject to customary completion adjustments; contingent cash payments of up to US$24 million linked to asset performance and oil price.
Sale of c. 6,000 bopd of 2021 production and c. 20 million barrels of 2P reserves, with an effective date of 1 July 2020.

The Government of Equatorial Guinea has approved the EG Transaction and confirmed that no tax arises on the disposal. Completion of both transactions and receipt of funds is expected in the first half of 2021.

Strategic and Financial Impact

These are value accretive transactions which further strengthen the balance sheet and are in line with Tullow’s strategy of focusing on high-margin, self-funded production with strong cash flows.

These transactions will have a neutral impact on Group’s 2021 operating cashflow at US$50 / barrel and increase Tullow’s 2021 pre-financing free cash flow by c. $0.1 billion; US$129 million of longer-term decommissioning liabilities assumed by the purchaser.

Important steps in reducing net debt and enabling the Group to deliver US$1 billion of self-help in two years through asset sales, exploration portfolio rationalization and material cost savings.

Limited impact of disposals on the debt capacity of Tullow’s Reserve-Based Lending facility; these transactions are also expected to provide positive impetus to Tullow’s ongoing constructive discussions with its creditors.

Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented: “These are important, value accretive deals for Tullow that will have a positive effect on our financial position as we look to further reduce our net debt and continue constructive discussions with our creditors. These transactions are also in line with our strategy of investing our capital on cash-generative, high return investment opportunities in our core portfolio.

“Our Equatorial Guinea assets have formed an important and stable part of our non-operated West Africa producing portfolio since 2004. We will be exiting Equatorial Guinea after many years of successful investment and co-operation and we thank the Government of Equatorial Guinea for their continued support. Gabon remains a core country of operations for Tullow and we will continue to invest in our assets and seek new opportunities.”

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Tullow Sells Gabon and Equa G Assets to Panoro

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Tullow Sells Gabon and Equa G Assets to Panoro

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