Tullow Oil parting ways with oil assets in Gabon for $300 million

Tullow Oil, an independent energy company with operations in West Africa, has inked binding heads of terms agreement for a $300 million net of tax sale of Gabon assets to Gabon Oil Company.

Gabon used to be a key part of Tullow’s production and infrastructure-led exploration (ILX) portfolio, especially after a cashless asset swap was agreed in 2023 to enable the firm to take more material positions in key fields, placing the Tchatamba facilities as a core hub.

During the same year, the African country’s government approved the extension of several licenses to 2046, reflecting the future potential of the fields and the longevity of these facilities. However, the firm has now made up its mind to divest its Tullow Oil Gabon subsidiary, which holds 100% of the company’s working interests in Gabon, for cash consideration of $300 million net of tax.

Richard Miller, Chief Financial Officer and Interim Chief Executive Officer of Tullow, commented: “This value accretive transaction with Gabon Oil Company (GOC) aligns with our strategic priorities to materially accelerate deleveraging and is an important step as we progress our refinancing plans this year. Together with GOC, we are focussed on finalising the full suite of documentation and driving the transaction to swift completion.

“Our strengthened balance sheet, repayment of our 2025 senior notes and imminent return to drilling at Jubilee, combined with production optimisation activities in the first quarter of 2025, demonstrates our continued delivery against our business objectives and positions the company strongly for the year ahead.” 

This disposal of a portfolio of non-core assets is said to be accretive to both equity and leverage, accelerating the deleveraging process. The sale of Tullow’s entire Gabonese portfolio of assets represents around 10 kbopd of 2025 production guidance and about 36 million barrels of 2P reserves independently audited at year-end 2024.

The effective date for the transaction is January 1, 2025. The company expects the divestment to reduce its net debt on a pro forma basis to $1.15 billion as of the effective date. Entering into the full sale and purchase agreement (SPA) is targeted for the second quarter of 2025.

This disposal is subject to conditions precedent, such as all necessary approvals, including from government ministries, CEMAC Competition Commission approval, and Tullow’s processing of the 2024 dividend in compliance with Gabonese requirements. The completion of the transaction and receipt of funds is expected around the middle of the year.

Tullow’s operations are focused on its West African producing assets in Ghana and Côte d’Ivoire, alongside a material discovered resource base in Kenya. The company has pledged to reach net zero on its Scope 1 and 2 emissions by 2030. Last month, the firm joined forces with Opsealog to digitalize its marine operations in Ghana.

Tullow picked the Noble Venturer drillship in December 2024 for a drilling assignment set to start in May 2025. Worth $171 million, the new drilling campaign will cover six firm wells off the coast of Ghana.

While the firm was engaged in preliminary discussions last year with Kosmos Energy regarding a possible all-share offer from the latter, these talks came to naught.