Tullow Oil plc has announced the successful completion of the sale of its assets in Gabon to Panoro Energy ASA (Panoro) to the tune of US$ 39 million, following customary adjustments.

Tullow aims at reducing its net debt from the sale of its assets. Thus, upon completion of the Dussafu transaction and following the transfer of funds, Tullow now has its net debt significantly reduced and no debt obligation until 2025. Therefore, it can now focus on its business plan and deliver a stronger growth performance this year compared to 2020.

This comes alongside a series of refinancing strategies by Tullow Oil plc such as its recently successful bond issuance of US$1.8 billion to retire its maturing debts.

The cash transaction reached completion yesterday, June 9, 2021 with Tullow Oil Plc selling off the Dussafu Marin permit asset.

Following the completion of this transaction, Panoro Energy ASA now holds 10% working interest in the Dussafu Marin permit, offshore Gabon, by its subsidiary Pan-Petroleum B.V.

The transaction includes additional contingent cash payments of up to US$24 million in aggregate, payable over a five year period. These contingent payments are linked to asset performance and oil price.

Furthermore, the closure of this transaction marks Tullow’s exit from its licences in Gabon, Uganda and Equatorial Guinea. Meanwhile, it also marks the final process for the agreed sales of its assets in these countries.

Upon the completion of the sale of the Dussafu asset, Tullow Oil becomes entitled to receive a further US$5 million contingent cash consideration on its previous sale of the asset in Equatorial Guinea.

Classifications of the transaction

The Dussafu transaction, agreed upon constitutes a class 2 transaction. As a result, it does not require the approval of Tullow’s shareholders.

The aggregate asset sales to Panoro constitutes about US$180 million. Of this amount, the Dussafu transaction consists of up to US$70 million. A further US$5 million consideration payable after the transactions reach completion.

Also, cash considerations of up to US$46 million payable at completion. This is subject to a customary working capital and other adjustments at completion. Additional contingent payments of up to US$24 million in aggregate was agreed upon, payable for over a five year period.

Speaking about the transaction, Rahul Dhir, CEO of Tullow Oil plc intimated that:

“The completion of this transaction is the final step of our asset sale programme in Uganda, Equatorial Guinea and Gabon. These sales have provided over $700 million in liquidity and have helped both lower our cost base and support our comprehensive refinancing. With no significant debt maturities until 2025, Tullow has the financial stability to deliver on its business plan.”
Rahul Dhir, CEO,Tullow Oil Plc

Chief Executive Officer of Panoro Energy ASA, John Hamilton commented that:

“We are extremely pleased to have completed the acquisition of an additional 10% working interest in the Dussafu Marin permit, offshore Gabon. This increased participation is consistent with Panoro’s strategy to expand in Gabon, where we see significant opportunities to achieve our ambitious in-country growth objectives. We look forward to continue to work with our partners BWE, GOC, and the Republic of Gabon.”
John Hamilton, CEO Panoro Energy ASA