Tullow Oil on Thursday announced that it had entered into a conditional agreement to acquire the interest of EO Group Limited (EO), consisting of its entire interests offshore Ghana, for a combined share and cash consideration of $305 million.
This acquisition will increase Tullow’s interest in the West Cape Three Points licence offshore Ghana by 3.5 per cent to 26.4 per cent and increase the Group’s interest in the world-class Jubilee Oil field, which Tullow Operates, by 1.75 per cent to 36.5 per cent.
This was contained in a statement issued and copied to Ghana News Agency in Accra.
Tullow will issue 10,137,196 ordinary shares of 10p each in the share capital of the Company (“the Shares”) to EO to satisfy approximately $216 million of the consideration.
The balance, which will include certain working capital adjustments, will be paid in cash. The number of shares has been determined using an average of the closing share prices and exchange rates for the five business days up to and including 24 May 2011.
The receipt of Tullow shares as part of the consideration gives EO the opportunity to retain an indirect interest in the upside potential of all of Tullow’s Ghanaian assets.
The effective date of the transaction is December 1, 2010. The agreement is conditional on the receipt of various consents, approvals and assurances, including from the Government of Ghana.
Upon completion of the agreement, application will be made to the UK Listing Authority and the Irish Stock Exchange for the Shares to be admitted to the official list of the UK Listing Authority and the official list of the Irish Stock Exchange and application will be made to the London Stock Exchange and the Irish Stock Exchange for the Shares to be admitted to trading on their respective main markets.
Mr Aidan Heavey, Tullow’s Chief Executive, commenting on the transaction said, “This acquisition represents an excellent opportunity to extend our interest in these high-quality assets in Ghana.”
“Following our exploration and production successes over the last few years, which culminated in First Oil in late 2010, this purchase further demonstrates Tullow’s long-term commitment to Ghana and our belief in its significant remaining potential.”
Tullow is a leading independent oil and gas, exploration and production group, quoted on the London and Irish Stock Exchanges (symbol: TLW) and is a constituent of the FTSE 100 Index.
The Group has interests in over 90 exploration and production licences across 22 countries and focuses on four core areas: Africa, Europe, South Asia and South America.
In Africa, Tullow has production in Ghana, Gabon, Côte d'Ivoire, Mauritania, Congo (Brazzaville) and Equatorial Guinea with two large appraisal and development programmes in Ghana and Uganda.
Tullow also has exploration interests in Gabon, Côte d'Ivoire, Liberia, Sierra Leone, Mauritania, Senegal, Tanzania, Madagascar, Namibia, Kenya and Ethiopia.
Tullow’s European interests are primarily focused on gas in the UK Southern North Sea where it has significant interests in the Caister-Murdoch System and the Thames area. The company also has interests offshore the Netherlands.
In South Asia, Tullow has exploration and production in Bangladesh and exploration interests in Pakistan.
In South America, Tullow has exploration interests in Guyana, French Guiana and Suriname.