Tullow Oil has announced that it has completed the takeover of Occidental Petroleum’s interests in the Jubilee and TEN fields in Ghana to Kosmos Energy for $118 million.
According to Tullow Oil, the cash consideration paid on completion was $118 million reflecting closing adjustments and was funded from cash on the balance sheet.
Impact on Tullow’s operation
This transaction takes Tullow’s equity interests to 38.9% in the Jubilee field and to 54.8% in the TEN fields and adds c.5 kbopd of unhedged daily production.
This equates to c.4 kbopd on an annualised basis and increases 2022 Group production guidance to 59-65 kbopd (30-32 kbopd at Jubilee, 13-14 kbopd at TEN and non-op portfolio unchanged at 16-19 kbopd).
This additional equity increases Tullow’s 2022 Group capital expenditure forecast by $30 million to $380 million and is expected to generate c.$300 million incremental free cash flow at $75/bbl between 2022 and 2026.
As of 31 December 2021, the transaction increases Tullow’s net 2P reserves by c.21 mmboe (9%) and has an estimated post-tax NPV 10 valuation of $355 million at $75/bbl.