Tullow Oil plc has announced that the sale of its assets in Uganda to Total has completed with $500 million consideration received earlier today (10 November).
Tullow is also due to receive a further US$75 million when a final investment decision is taken on the development project plus contingent payments linked to the oil price payable after production commences.
The closing of this transaction follows the satisfaction of all deal conditions, announced on 21 October 2020, which included the execution of the binding Tax Agreement, the approval for the transfer of Tullow’s interests to Total and the transfer of operatorship for Block 2.
Although Tullow will retain a financial link to the development project through the potential contingent payments, the closing of this transaction marks Tullow’s exit from its licences in
Uganda after 16 years of operations in the Lake Albert basin.
Tullow now has a net debt of US$2.4 billion and available liquidity of US$1 billion. Rahul Dhir, CEO, and Les Wood, CFO, will lay out their plans for the Group in the coming years at a Capital Markets Day on 25 November 2020.
Rahul Dhir, chief executive officer of Tullow Oil Plc said: “The closing of our transaction with Total evokes mixed emotions within Tullow. While we are sad to be exiting Uganda after many years, the $575 million of proceeds form an important part of our plan to strengthen Tullow’s balance sheet and improve our financial position.”
“We will watch the progress of Uganda’s oil and gas industry with much interest and all of us at Tullow wish the people and Government of Uganda and our former Joint Venture Partners every good fortune as they take this important project forward,” he added.
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