US oil & gas player pondering takeover of UK firm with initial talks underway

U.S.-headquartered oil and gas exploration and production company Kosmos Energy is mulling over a potential acquisition of the UK-headquartered Tullow Oil, which is set on exploring oil and gas resources in Africa.

Tullow was the first to address the recent media speculation by confirming its engagement in preliminary discussions with Kosmos Energy regarding a possible all-share offer from the latter, which also corroborated a potential transaction involving the duo.

The U.S. firm claims it is engaged in “very preliminary discussions” with Tullow regarding a possible all-share offer for the latter, highlighting there can be no certainty any offer will be made nor as to the terms on which such an offer might rest.

However, Kosmos underlines that it is required, by not later than January 9, 2025, to either announce a firm intention to make an offer for Tullow or disclose that it does not intend to make such an offer. This deadline can be extended with the consent of the takeover panel in accordance.

Kosmos is focused on assets along the offshore Atlantic Margins, with key ones located offshore Ghana, Equatorial Guinea, and the U.S. Gulf of Mexico, alongside a gas development offshore Mauritania and Senegal. The firm made a move to increase its working interest and take over the operatorship of giant gas discoveries offshore Senegal last year, after BP’s withdrawal from the field.

At the close of business on December 12, 2024, the business day before the disclosure of preliminary acquisition talks, Kosmos’ issued share capital entailed 471,816,671 ordinary shares with a par value of $0.01 each in the capital which carries voting rights of one vote per share and admitted to trading on the New York Stock Exchange and London Stock Exchange.

On the same date, Tullow had 1,458,808,163 ordinary shares with a nominal value of 10 p each and voting rights admitted to trading on the main market of the London Stock Exchange but no ordinary shares in treasury. With over 30 licenses across seven countries in Africa and South America, the firm’s operations are centered on its West Africa-producing assets in Ghana, Gabon, and Côte d’Ivoire.

The company also has a material-discovered resource base in Kenya. Tullow’s exploration portfolio, which spans both Africa and South America, is focused on a balance of near-field short-cycle opportunities, new plays in proven basins, and selected frontier areas.

In South America, the firm is engaged in exploration and appraisal activities in three blocks located in the Malvinas West Basin in Argentina. The company is also working on decommissioning assets in the United Kingdom, Europe.

The biggest slice of Tullow’s portfolio is in Africa, enclosing operated exploration, development, production, and non-operated production assets in Côte d’Ivoire, Gabon, and Ghana, where the majority of the firm’s production comes from the Jubilee and TEN fields.

In addition, the company has oil discoveries, which are progressing to the development stage in Kenya, and assets being in the decommissioning phase in Mauritania.