Tullow Oil will sell its entire working interests in Kenya, held through its subsidiary Tullow Kenya BV, to Gulf Energy, a Kenyan energy and infrastructure group, for a total consideration of $120 million.
The transaction is structured to provide Tullow, the London-listed exploration firm, with near-term cash receipts of $80 million and a back-in right for a 30 per cent stake in potential future developments at no cost.
According to Tullow’s statement on its website, the consideration will be paid in installments:
- $40 million upon completion of the sale.
- $40 million payable by the earlier Field Development Plan (FDP) approval or June 30, 2026.
- $40 million payable over five years starting from the third quarter of 2028.
Furthermore, Tullow will be entitled to royalty payments subject to specific conditions and retains the option to acquire a 30 per cent participating interest in future development phases without incurring any cost.
Tullow stated that the transaction is expected to improve both its equity and leverage positions, further accelerating its debt reduction efforts.
Richard Miller, Tullow’s Chief Financial Officer and Interim Chief Executive, commented, “Today’s announcement marks another step forward in Tullow’s accelerated deleveraging journey with near-term cash receipts of $80 million and mitigating significant capital exposure, whilst retaining a material option on the future development of the project. I am confident that the proceeds from this transaction, coupled with the $300 million from the disposal of our assets in Gabon, position the business strongly for a successful refinancing.”
He added, “We look forward to working with Gulf Energy, who have the requisite financing to complete the transaction and are a strong and credible counterparty, and by doing so, unlock material value for the people of Kenya.”
