British oil company Tullow Oil on Tuesday announced that the sale of its assets in Uganda to Total has completed with the 500 million U.S. dollar consideration received earlier in the day.
Tullow in a statement posted on its website said it is due to receive a further 75 million dollars 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 October 21, 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,” the statement said.
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 licenses in Uganda after 16 years of operations in the Lake Albert basin, the statement said.
“While we are sad to be exiting Uganda after many years, the 575 million dollars of proceeds form an important part of our plan to strengthen Tullow’s balance sheet and improve our financial position,” Rahul Dhir, Chief Executive Officer of Tullow Oil Plc said.
“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.”
Tullow now has a net debt of $2.4 billion and available liquidity of $1 billion. Rahul Dhir, CEO and Les Wood, CFO, will lay out their plans for the group in the coming days at a Capital Markets Day on 25 November 2020.
About Tullow Oil plc
Tullow is a leading independent oil & gas, exploration and production group, quoted on the London, Irish and Ghanaian stock exchanges (symbol: TLW). The Group has interests in over 70 exploration and production licences across 14 countries in Africa and South America.