Tullow Oil announced that its wholly-owned subsidiary Tullow Ghana Limited (TGL) on behalf of itself and its joint venture (JV) partners has signed a Sale and Purchase Agreement (SPA) with T.E.N. Ghana MV25 BV to acquire the floating production, storage and offloading vessel (FPSO) Prof. John Evans Atta Mills, for a gross consideration of $205 million (c.$125.6 million net to Tullow) (the Transaction) to be paid upon completion of the Transaction at the end of the first quarter of 2027.

The FPSO is the production facility for the TEN Fields on the Deep Water Tano Block, offshore Ghana. Following completion of the Transaction Tullow intends to maximise operational synergies with the adjacent Jubilee Field and drive further cost efficiencies which will underpin the longer-term development of the TEN and Jubilee fields.

Transaction highlights

·         TGL, as operator of the TEN fields on the Deep Water Tano Block, offshore Ghana, has signed a SPA to acquire the TEN FPSO on behalf of itself and its JV partners, Ghana National Petroleum Corporation, GNPC Explorco, Kosmos Energy and PetroSA.

·        The Transaction is in line with Tullow’s strategy to optimise production, reduce fixed costs through the removal of the annual lease cost and realisation of operating cost efficiencies, and drive long-term value creation.

·        Completion is subject to the satisfaction of conditions precedent and relevant regulatory approvals.

·        Tullow’s net consideration, equivalent to approximately one year of current net lease cost, is expected to be funded by in-year cash flow from TEN and will be paid upon completion of the Transaction at the end of the first quarter of 2027.

Ian Perks, Chief Executive Officer of Tullow, commented:

“This value accretive transaction is another important milestone for Tullow, in line with our strategic priority to optimise production activities and deliver improved economics as we leverage our operational expertise. The acquisition of the FPSO will deliver material cost savings by removing the annual lease cost and resetting our fixed costs at the TEN fields. By extending the economic life and removing the annual lease cost we will create additional free cash flow potential for the company beyond 2027. This transaction is another key deliverable for Tullow, strengthening the foundations for future value creation.”