Tullow Oil plc has announced that its wholly-owned subsidiary, Tullow Overseas Holdings BV, has signed a heads of terms agreement with Gulf Energy Ltd for the sale of Tullow Kenya BV, which holds Tullow’s entire working interest in Kenya. The total consideration for the transaction is a minimum of $120 million.
The agreed consideration will be structured in three tranches: a $40 million payment upon completion; a further $40 million payable either upon Field Development Plan (FDP) approval or by 30 June 2026, whichever comes first; and the final $40 million to be paid over five years starting from Q3 2028. In addition to the fixed payments, Tullow will receive royalty payments, subject to certain conditions, and retains a 30% back-in right (pre-Government participation) for any future development phases at no cost.
This corporate sale includes the full transfer of all past and future liabilities to Gulf Energy and represents a significant transaction under UK Listing Rule 7, as updated in July 2024. Final transaction documentation is expected to be completed in the coming months, with the first payment and transaction close anticipated in 2025.
The deal supports Tullow’s ongoing financial strategy, being accretive to both equity and leverage, and plays a key role in its accelerated deleveraging plan.
Richard Miller, Tullow’s Chief Financial Officer and Interim CEO, stated that the transaction delivers $80 million in near-term cash, reduces capital exposure, and preserves future upside potential through the retained interest. He also emphasized that, combined with proceeds from the earlier $300 million Gabon asset sale, this agreement positions Tullow well for a successful refinancing.
Miller expressed confidence in Gulf Energy’s financial capability to close the deal and highlighted the potential value it could unlock for Kenya.
