REG - Tullow Oil PLC - Guyana update

Tullow OilAnnouncement

10/08/2023 07:00

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RNS Number : 9220I  Tullow Oil PLC  10 August 2023

TULLOW OIL PLC

 

 

Guyana update

 

10 August 2023 - Tullow Oil Plc ("Tullow") is pleased to announce that it has
agreed to sell its total interest in Tullow Guyana B.V. ("TGBV"), which
includes the Orinduik licence (Tullow 60% operated equity) in Guyana to Eco
Guyana Oil and Gas (Barbados) Limited ("Eco") (the "Transaction") in exchange
for a combination of upfront cash and contingent consideration.

Tullow's decision to exit the Orinduik licence is in line with its strategy to
focus on its high return production assets in Africa and infrastructure-led
exploration around producing hubs and delivers its objective to unlock value
in emerging basins. In 2019, Tullow drilled two exploration wells on the
Orinduik licence which yielded uncommercial oil discoveries. Nonetheless,
Tullow recognises the material oil resource potential remaining in the
Orinduik licence and as such, the terms of the Transaction allow Tullow to
retain exposure to any potential future success in the region.

Transaction summary:

-       US$700,000 cash payment upon transfer of TGBV's 60% equity and
operatorship of the Orinduik licence to Eco, to be paid to Tullow Overseas
Holdings B.V. ("TOHBV") on completion of the Transaction (the "Initial
Consideration").

-       Contingent consideration is payable to TOHBV, which is linked to
a series of potential future milestones and triggered as follows:

o  US$4 million in the event of a commercial discovery

o  US$10 million payment upon the issuance of a production licence from the
Government of Guyana

o  Royalty payments on future production - 1.75% of the 60% working interest
entitlement revenue net of capital expenditure and lifting costs

-       Transaction and payment of the Initial Consideration outlined
above is subject to certain market-standard conditions precedent, including
Government and JV approvals.

-       Proceeds from this transaction will be put towards general
corporate purposes.

-       Completion is expected to occur in the second half of 2023.

 

Jean-Medard Madama, Director Exploration, Non-Operated Assets and
Decommissioning, commented today:

"This transaction is in line with our strategy to optimise our portfolio
through opportunities to unlock value from our emerging basin licences, whilst
focusing our capital expenditure on our high return producing assets and
growth opportunities around existing infrastructure."

 

CONTACTS
 Tullow Oil plc (Investors)                   Camarco (Media)

 (London)                                     (London)

 ir@tullowoil.com (mailto:ir@tullowoil.com)   (+44 20 3757 4986)

 Nicola Rogers                                Billy Clegg

 Matthew Evans                                Georgia Edmonds

                                              Rebecca Waterworth

 

Transaction Structure

TOHBV has signed a sale and purchase agreement (the "SPA") with Eco for the
transfer of its entire interest in the Orinduik licence via the corporate sale
of TGBV to Eco in exchange for a mix of cash and a series of contingent
payments based on future milestones.

Pursuant to the SPA, TOHBV has agreed to transfer to Eco for cash
consideration TOHBV's entire shareholding in TGBV. TGBV holds an undivided 60%
participating interest and Operatorship in and under (i) a petroleum agreement
between the Minister responsible for Petroleum representing the Government of
the Co-operative Republic of Guyana, Eco (Atlantic) Guyana Inc. and TGBV dated
14 January 2016 (as amended from time to time) (the "PA") and (ii) the joint
operating agreement dated between TGBV, Eco (Atlantic) Guyana Inc., and TOQAP
dated 18 January 2016 (as amended from time to time).

Additional cash consideration may be received by TOHBV from Eco and any
successors, in the form of contingent payments, which will be payable on
upstream revenues in the form of royalty payments will become due and payable
to TOHBV once upstream revenues from the Orinduik licence commences.

Subject to the satisfaction of certain market standard conditions precedent,
including Government and JV approvals, the Transaction is expected to complete
in the second half of 2023.

Additional information

The Transaction is classified as a Class 2 transaction as defined by Chapter
10 of the Listing Rules and is therefore not conditional on the approval of
Tullow's shareholders.

On 31 December 2022, the gross asset value attributable to the Transferred
Interests subject to the Transaction amounted to $1.5 million as per the
audited TGBV financial statements. As of 31 December 2022, the gross 2C
resource attributable to the Transferred Interests amounted to 47.7mmbbls.

 

Notes to editors

Tullow is an independent oil & gas, exploration and production group which
is quoted on the London and Ghanaian stock exchanges (symbol: TLW). The Group
has interests in over 30 licences across eight countries. In March 2021,
Tullow committed to becoming Net Zero on its Scope 1 and 2 emissions by 2030.
For further information, please refer to our website at www.tullowoil.com
(http://www.tullowoil.com/) .

Follow Tullow on:

Twitter: www.twitter.com/TullowOilplc (http://www.twitter.com/TullowOilplc)

YouTube: www.youtube.com/TullowOilplc (http://www.youtube.com/TullowOilplc)

Facebook: www.facebook.com/TullowOilplc (http://www.facebook.com/TullowOilplc)

LinkedIn: www.linkedin.com/company/Tullow-Oil
(http://www.linkedin.com/company/Tullow-Oil)

 

THIS ANNOUNCEMENT IS AN ANNOUNCEMENT AND NOT A CIRCULAR OR PROSPECTUS OR
EQUIVALENT DOCUMENT AND PROSPECTIVE INVESTORS SHOULD NOT MAKE ANY INVESTMENT
DECISION ON THE BASIS OF ITS CONTENTS.

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR
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ANY FAILURE TO COMPLY WITH THE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE
SECURITIES LAWS OF ANY SUCH JURISDICTION.

No statement in this announcement is intended as a profit forecast or profit
estimate.

This announcement includes statements that are, or may deemed to be,
"forward‐looking statements" within the meaning of the securities laws of
certain jurisdictions. These forward‐looking statements can be identified by
the use of forward‐looking terminology, such as "anticipate", "expect",
"suggests", "plan", "believe", "intend", "estimates", "targets", "projects",
"should", "could", "would", "may", "will", "forecast" and other similar
expressions or, in each case, their negative or other variations or comparable
terminology. These forward looking statements include all matters that are not
historical facts. They appear in a number of places throughout this
announcement and include statements regarding Tullow's or Tullow's directors'
plans, estimates, intentions, beliefs or current expectations concerning,
among other things, Tullow's exploration and development plans and the timing
and cost thereof, future production levels and volumes, future operating cost
levels, the grant and timing of future governmental or commercial or joint
venture partner approvals or consents, the timing, outcome and potential scope
of liability in any litigation, proceedings or other disputes and Tullow's
results of operations, financial condition, prospects, growth, strategies and
the industry in which the Group operates more generally.

Forward‐looking statements are not guarantees of future performance and the
Group's actual results of operations, financial condition and the development
of the industry in which it operates, may differ materially from those made in
or suggested by the forward‐looking statements contained in this
announcement. In addition, even if the Group's results of operations,
financial condition and the development of the industry in which it operates,
are consistent with the forward‐looking statements contained in this
announcement, those results or developments may not be indicative of results
or developments in subsequent periods.

Any forward‐looking statements that are made in this announcement speak only
as at the date of such statement and, other than as may be required by the
Financial Conduct Authority, the London Stock Exchange, the Ghana Stock
Exchange or applicable law (including as may be required by the UK Listing
Rules, the Disclosure Guidance and Transparency Rules and the Prospectus
Rules), Tullow expressly disclaims any obligation to release publicly any
updates or revisions to any forward‐looking statements contained in this
announcement. Comparisons of results for current and any prior periods are not
intended to express any future trends or indications of future performance,
unless expressed as such, and should only be viewed as historical data.

 

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