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


Frontera Resources Corporation: Update on Ud-2 Well

Frontera Resources Corporation (AIM: FRR), the European focused oil and gas exploration and production company, is pleased to provide an update on progress of its workover operations at Ud-2 well, situated inside the 950 km 2 Mtsare Khevi Gas Complex area, located in onshore Block 12 in Georgia. ...

OilVoice Press - OilVoice


Posted 3 days agoPress > frontera resourcesUd-2 wellAIM +2

Major Acquisition of Producing Assets in Neuquén Basin, Argentina from Chevron

President Energy (AIM: PPC), the upstream oil and gas company with a diverse portfolio of production and exploration assets focused primarily in Argentina, is pleased to announce the acquisition of Chevron's 100% operated interest in its oil producing assets at Puesto Flores and Estancia Vieja in ...

OilVoice Press - OilVoice


Posted 3 days agoPress > ChevronNeuquen BasinArgentina +5

Oil and Gas Networking Website Oilpro Says It’s Shutting Down

Houston—Oilpro, a networking and social media website geared to the oil and gas industry, said Monday it is shutting down operations. Oilpro's shutdown comes eight months after its founder David Kent pleaded guilty to one count of computer fraud in US District Court, Southern District of New York ...

OilVoice Press - OilVoice


Posted 1 month agoLink > oilpro

EnQuest - Kraken First Oil

  EnQuest confirms that first oil from the Kraken development was delivered on 23 June 2017.  During the initial ramp-up period, the 13 wells that have been drilled and completed to date, comprising 7 producers and 6 injectors, are being brought online in a phased manner, to maximise long term pr ...

OilVoice Press - OilVoice


Posted 2 months agoPress > EnQuestKrakenSpud Watch

US Atlantic Coast refiners face new threat in Buckeye proposal to reverse pipeline: Fuel for Thought

Storm clouds are gathering once again over US Atlantic Coast refineries, but unlike a few years ago when it was high oil prices causing a problem, this time the threat is coming from the Midwest. Hemmed in by geography, Midwestern refiners are looking east as a logical place to sell their gasoline ...

OilVoice Press - OilVoice


Posted 2 months agoOpinion > PlattsBuckeyepipeline
All posts from oilvoice