Tullow Oil PLC (LSE:TLW) has agreed to sell its Kenyan business to Gulf Energy in a deal worth at least $120 million.
It will see the UK-listed oiler receive $80 million of cash, plus the transfer of all past and future liabilities. And, a further $40 million payment will be paid over five years, starting from Q3 2028. Other future royalties may apply also.
Tullow interim CEO Richard Miller described it as “another step forward” in the company’s ‘accelerated deleveraging journey’ – highlighting that it boosts cash receipts and mitigates significant capital exposure.
“I am confident that the proceeds from this transaction, coupled with the $300 million from the disposal of our assets in Gabon, position the business strongly for a successful refinancing,” Miller said.
"We look forward to working with Gulf Energy, who have the requisite financing to complete the transaction and are a strong and credible counterparty, and by doing so, unlock material value for the people of Kenya."
Tullow will retail a ‘back-in’ right, for a 30% stake in the Kenyan assets.