Tullow agrees $180m sale of assets in West Africa to Panoro
Tullow Oil signed two separate sale and purchase agreements with Panoro Energy ASA (Panoro) for all of Tullow’s assets in Equatorial Guinea (the EG Transaction) and the Dussafu asset in Gabon (the Dussafu Transaction) in each case with an effective date of 1 July 2020.
The EG Transaction constitutes a Class 1 transaction under the UK Listing Rules and is subject to the approval of Tullow’s shareholders. The Dussafu Transaction constitutes a Class 2 transaction and therefore does not require shareholder approval. Completion of the EG Transaction and the Dussafu Transaction are not inter-conditional. However, both transactions are subject to the approval by Panoro’s shareholders of a proposed equity fundraising, to part finance the transactions by Panoro, and also customary government and other approvals.
Panoro’s two largest shareholders, Sundt AS and Kistefos AS, have committed to subscribe for new ordinary shares in Panoro, representing an amount of NOK 100 million (approximately $11.6 million) and NOK 86 million (approximately $10 million) respectively, in Panoro’s equity fundraising. In addition, members of Panoro’s board and executive management team, including its Chairman, Julien Balkany and its CEO, John Hamilton, are participating in the placing.
Completion of both transactions and receipt of funds is expected in the first half of 2021.
Rahul Dhir, CEO, Tullow Oil: "These are important, value accretive deals for Tullow that will have a positive effect on our financial position as we look to further reduce our net debt and continue constructive discussions with our creditors. These transactions are also in line with our strategy of investing our capital on cash-generative, high return investment opportunities in our core portfolio. Our Equatorial Guinea assets have formed an important and stable part of our non-operated West Africa producing portfolio since 2003. We will be exiting Equatorial Guinea after many years of successful investment and co-operation and we thank the Government of Equatorial Guinea for their continued support. Gabon remains a core country of operations for Tullow and we will continue to invest in our assets and seek new opportunities.”