Press

Tullow announces a substantial farm down to Total in Uganda

Posted by OilVoice Press - OilVoice

10-Jan-2017


Tullow Oil plc (Tullow) is very pleased to announce that it has agreed a substantial farm-down of its assets in Uganda to Total E&P Uganda B.V. (Total).  

A Sale and Purchase Agreement with an effective date of 1 January 2017 has been signed in which Tullow has agreed to transfer 21.57% of its 33.33% interests in Exploration Areas 1, 1A, 2 and 3A in Uganda to Total for a total consideration of $900 million. This agreement will allow Tullow to retain an 11.76% interest in the upstream and pipeline, which would reduce to 10% when the Government of Uganda formally exercises its right to back-in.

This agreement is based on the transfer of licence interests from Tullow to Total in exchange for cash and deferred consideration to be paid as and when the Lake Albert Development Project reaches a series of key milestones and represents a reimbursement by Total of a portion of Tullow's past exploration and development cost. The total consideration for the transaction is structured as follows:

  • $200 million in cash consisting of $100 million on completion of the transaction and $50 million at both Final Investment Decision and First Oil. 
  • $700 million in deferred consideration which will be used by Tullow to fund the company's share of the costs of the upstream development project and the associated export pipeline project.

The Lake Albert Development Project is a major development which expects to achieve around 230,000 bopd when it reaches plateau. Development Plans were approved by the Government in August 2016 which Tullow expects will require $5.2 billion gross of upstream capex to develop the first 1.2 billion barrels of oil with $3 billion expected to be required to reach First Oil around three years after FID. The Government of Uganda has agreed an export route through Tanzania and the current estimate for the pipeline capital cost is around $3.5 billion. The pipeline is expected to be funded through a combination of debt and equity. Tullow carries approximately $1.7 billion for Uganda which includes fair value allocations and capitalised interest. The Group expects a pre-tax write-off as a result of this disposal of approximately $0.4 billion to be booked in its 2016 Full Year Results.

Completion of this transaction is subject to certain conditions, including the approval of the Government of Uganda. Once this transaction has completed, Tullow will cease to be an operator in Uganda but will retain a presence in-country to manage its non-operated position.

Aidan Heavey, Chief Executive Officer, commented today:
"Today's agreement will allow the Lake Albert Development to move ahead swiftly, increasing the likelihood of FID in 2017 and First Oil by the end of 2020. I am particularly pleased that Tullow's long-term commitment to and presence in Uganda is guaranteed by this transaction and that we will remain an active investor in Uganda's oil and gas sector. The deal will secure future cash flow for the Group from one of the industry's few truly low cost development projects without any additional cash requirements expected. We will work closely with the Government of Uganda, its associated agencies and with Total and CNOOC to move this transaction forward as smoothly as possible over the coming months."

Tullow OilUganda

More items from oilvoice


Statoil: Dudgeon Offshore Wind Farm Officially Opened

Today, operator Statoil and partners Masdar and Statkraft officially opened the Dudgeon offshore wind farm in Great Yarmouth, UK. Since the investment decision was made in 2014, construction costs have been reduced by more than 15%, from GBP 1.5 billion to approximately GBP 1.25 billion. ...

OilVoice Press - OilVoice


Posted 1 hour agoPress > Dudgeon Offshore Wind FarmUnited KingdomStatoil +3

ONGC Videsh Acquires 15% Interest in Eco Atlantic’s PEL 0030 “Cooper Block”, Offshore Namibia

Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX-V:EOG), is delighted to announce that ONGC Videsh, through its wholly owned subsidiary ONGC Videsh Vankorneft Pte. Ltd. (“OVVL”), has entered into agreement with Tullow Namibia Limited (“Tullow”) whereby OVVL will acquire a 15% working interest in the ...

OilVoice Press - OilVoice


Posted 2 hours agoPress > ONGC VideshAcquisitionEco Atlantic +6

Eight Energy Companies Commit to Reduce Methane Emissions Within Natural Gas Industry

BP, Eni, ExxonMobil, Repsol, Shell, Statoil, Total and Wintershall today committed to further reduce methane emissions from the natural gas assets they operate around the world. The energy companies also agreed to encourage others across the natural gas value chain – from production to the final co ...

OilVoice Press - OilVoice


Posted 2 hours agoPress > Methan Emissionsnatural gasBP +7

Prospex Oil and Gas Plc - Commencement of Drilling, Onshore Italy

Further to the Company's announcement of 31 October 2017, Prospex Oil and Gas Plc, the AIM quoted investment company, is pleased to confirm it has been advised by the operator, Po Valley Energy ("PVE"), that the Podere Maiar-1d appraisal/redevelopment well ('Podere Maiar' or 'the Well') on the Pode ...

OilVoice Press - OilVoice


Posted 2 hours agoPress > Prosper Oil and GasDrillingonshore +3

U.S. Average Gasoline Prices This Thanksgiving are Higher than the Previous Two Years

Source: U.S. Energy Information Administration, Gasoline and Diesel Fuel Update Heading into the Thanksgiving holiday weekend, U.S. retail regular-grade gasoline averaged $2.57 per gallon (gal), up 41 cents/gal from the same time last year. Although gasoline prices are higher than in both ...

OilVoice Press - OilVoice


Posted 2 hours agoOpinion > EIAEnergy Information Administration EIAUnited States +1
All posts from oilvoice