Tullow Oil Plc completes sale of Kenya property, which had 463 million barrels of 2C sources as of 31 December 2024, to native agency Gulf Power Ltd.
British agency has obtained $40 million, reflecting your entire proceeds of tranche A as set out within the Sale and Buy Settlement (SPA).
Tullow retains a no-cost back-in proper for a 30% participation in potential future improvement phases.
After 14 years exploring oil and fuel sources in Kenya, British agency Tullow Oil has sealed its exit from the East African nation, leaving the job of advancing extraction to an area firm Gulf Power Ltd.
Gulf Power Ltd will now take over all of Tullow’s working pursuits in Kenya, the place oil discover is advancing in the direction of improvement within the South Lokichar Basin, in Turkana County. Since 2011 Tullow has been exploring and appraising its property in Kenya as a part of the longer-term oil improvement goal. The disposed property have 463 million barrels of 2C sources as of 31 December 2024, the British agency famous in July.
In a market replace posted by Tullow Oil on the London Inventory Change, the corporate stated its exit from Kenya follows profitable completion of the sale of its whole working curiosity to Auron Power E&P Ltd, an affiliate of Gulf Power Ltd.
Potential future improvement
Tullow famous that it has obtained $40 million, reflecting your entire proceeds of tranche A as set out within the Sale and Buy Settlement (SPA).
“The transaction represents the sale of 100 per cent of the shares in Tullow’s subsidiary Tullow Kenya BV, which holds Tullow’s whole working pursuits in Kenya, for a minimal money consideration of $120 million, topic to customary changes,” stated Tullow Kenya BV Managing Director Madhan Srinivasan whereas confirming the sale.
Based on Madhan, whereas the cost will go a good distance in strengthening Tullow’s steadiness sheet, the British oil explorer is predicted to retain royalties, topic to sure circumstances, and a no-cost back-in proper for a 30 per cent participation in potential future improvement phases of the power investments in northern Kenya.
In July, Tullow famous that its SPA with Auron Power E&P notes that the sale will likely be cut up right into a $40 million cost due on completion, $40 million payable on the earlier of Subject Growth Plan (FDP) approval or 30 June 2026, and $40 million payable over 5 years from the third quarter of 2028 onwards.
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Tullow Oil entitled to royalty funds
Moreover, SPA notes that Tullow will likely be entitled to royalty funds, topic to sure circumstances. Tullow additionally retains a no-cost back-in proper for a 30 per cent participation in potential future improvement phases. This proper will be exercised if a third-party investor participates in future improvement phases, whether or not by a sale or farm-down of the Purchaser’s curiosity within the property.
“After 14 years in Kenya, Tullow leaves behind robust property, and we’re delighted to move the baton to Gulf Power, a succesful Kenyan firm within the lead as much as first oil, making Kenya an oil-producing nation. We’re very grateful for the help and co-operation prolonged to TKBV by varied stakeholders within the Authorities of Kenya,” Madhan defined.
Take undertaking ahead
On his half, Gulf Power Ltd CEO Paul Limoh stated: “We’re delighted to finish this transaction and to deliver these property underneath the stewardship of Gulf Power Ltd. This undertaking will play an essential position in advancing Kenya’s home power sector, creating alternatives for progress and improvement within the Turkana area, in addition to supporting the nation’s long-term power safety. We thank Tullow for its years of funding and dedication, and we look ahead to constructing on that basis as we work with companions and stakeholders to take the undertaking ahead.”
Ian Perks, Chief Government Officer of Tullow, commented: “The profitable completion of this transaction marks a big milestone for the corporate and the achievement of one other certainly one of our key 2025 strategic priorities. The usage of proceeds helps to strengthen our steadiness sheet additional, and I wish to thank the workforce for his or her exhausting work and dedication, which have helped place the corporate strongly as we glance to refinance our capital construction this 12 months. On behalf of everybody at Tullow, I prolong our greatest needs to the individuals and Authorities of Kenya and need Gulf Power each success as they advance this undertaking.”
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