Tullow Oil plc has announced the results of its offer to purchase a portion of its outstanding $800,000,000 at 7.00% Senior Notes due 2025 bearing ISIN: USG91237AA8 and CUSIP: G91237AA8 for cash, which was announced on June 12, 2023, on the terms and subject to the conditions set out in the tender offer memorandum dated June 12, 2023 prepared in accordance with the Offer.

Tullow, meanwhile, increased the aggregate Tender Consideration to $99,999,182.50. The Final Acceptance Amount, representing the final aggregate principal amount of Reg S Notes accepted for Purchase by the Company pursuant to the Offer, is $166,537,000.

Tullow said it will use approximately $100.0 million of cash on balance sheet to fund the purchase of $166.5 million in aggregate principal amount of Reg S Notes. This transaction delivers a value accretion of $86.3 million from a combination of $66.5 million net debt reduction and coupon savings to maturity of $19.8 million.

Tullow Elects to Set the Maximum Purchase Price

Tullow elects to set the Maximum Purchase Price, as determined pursuant to the Unmodified Dutch Auction Procedure, at 65.00%, achieving a weighted average purchase price of 60.05%. The weighted average price of tender offers not accepted for purchase is 74.64%.

Richard Miller, Chief Financial Officer, commenting on the transaction expressed his excitement, noting that it is a step in the right direction in managing the company’s debt issues.

“This transaction, which demonstrates our confidence in the business, is an important step in addressing our debt maturities. We have reduced gross debt by $266 million this year through this transaction and the annual amortisation of the 2026 Notes, and we have accelerated our deleveraging trajectory.

“We continue to progress a range of options to address the remainder of the 2025 Notes, and with the start-up of the Jubilee South East development around mid-year we will generate material free cash flow in the second half of the year and beyond.”
Richard Miller

Meanwhile, as the aggregate principal amount of the Reg S Notes validly tendered up to and including the Maximum Purchase Price is above the Final Acceptance Amount, the company has accepted for purchase Reg S Notes tendered at the Maximum Purchase Price subject to a Scaling Factor of 86.999%.

In the event of any scaling on a pro rata basis where such scaling would result in either (i) the Company accepting Reg S Notes from the relevant Eligible Holder in an aggregate principal amount of less than $200,000 or (ii) the principal amount of Reg S Notes not purchased and returned back to the relevant Eligible Holder being an aggregate principal amount of less than $200,000, the Company has elected to accept such Tender Instructions in full, without applying a Scaling Factor.

The Settlement Date for the Offer is today, June 20, 2023. Notes accepted for purchase by the Company pursuant to the Offer will be retired and cancelled.