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Tullow Ghana Limited (TGL), a subsidiary of the UK-headquartered Tullow Oil, an independent energy company with operations in West Africa, has set the wheels in motion to acquire a floating production, storage, and offloading (FPSO) vessel, which is working off the coast of Ghana, West Africa.
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The company has signed a sale and purchase agreement (SPA) on behalf of itself and its joint venture (JV) partners – Ghana National Petroleum Corporation, GNPC Explorco, Kosmos Energy, and PetroSA – with T.E.N. Ghana MV25 to acquire the FPSO Prof. John Evans Atta Mills for a gross consideration of $205 million (around $125.6 million net to Tullow) to 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. “
The FPSO serves as the production facility for the TEN fields on the Deep Water Tano Block offshore Ghana. Following completion, the operator intends to maximise operational synergies with the adjacent Jubilee field and drive further cost efficiencies, which will underpin the longer-term development of these fields.
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This acquisition is perceived to be in line with Tullow’s strategy to optimise production, reduce fixed costs through the removal of the annual lease cost and realization of operating cost efficiencies, and drive long-term value creation. The completion is subject to the satisfaction of conditions precedent and relevant regulatory approvals.
The company’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.
Tullow Oil also revealed the Ghanaian Parliament’s ratification of the extension of its West Cape Three Points and Deep Water Tano petroleum agreements, which cover the Jubilee and TEN fields in Ghana.
As a result, these agreements have been extended to December 31, 2040. Ghana National Petroleum Corporation’s share in the field will increase by a further 10% interest and the joint venture partners’ shares will decrease pro rata from July 20, 2036.
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The firm secured revised terms for the supply of gas from the Jubilee field to the end of the extended period at an escalating price of $2.50/mmbtu. A gas payment security mechanism and heads of terms for the potential supply of gas from the TEN fields has been agreed with the government of Ghana.
Perks highlighted: “The ratification of these agreements secures our long-term operating position, providing a runway for responsible resource development and a stable investment environment alongside the payment security for gas.
“This is a significant milestone which underpins Tullow’s long-term commitment to Ghana and allows for continued investment in its principal Jubilee and TEN assets. It is a result of excellent collaboration between the joint venture partners, including GNPC, and the government of Ghana.”
about 5 months ago
Tullow Ghana Limited (TGL), a subsidiary of the UK-headquartered Tullow Oil, an independent energy company with operations in West Africa, has set the wheels in motion to acquire a floating production, storage, and offloading (FPSO) vessel, which is working off the coast of Ghana, West Africa.
