Gulf Energy has commenced its acquisition of Tullow Kenya’s entire assets in a deal worth Ksh 15.5 billion following the signing of sale and purchase agreement with Tullow Oil plc.
The transaction which was announced in April this year by Tullow Oil will see Gulf Energy which is a subsidiary of Auron Energy E&P Limited acquire entire stake in the oil exploration firm.
Richard Miller, Chief Financial Officer and Interim Chief Executive Officer, Tullow, commented:
“We are pleased to announce the signing of the Kenyan SPA, marking another step closer to completion of the Transaction with Gulf Energy. For a total consideration of at least US$120 million, the Transaction supports our strategic priority to strengthen the balance sheet, with the first two payments totalling US$80 million expected before the end of the year.
“We are pleased to announce the signing of the Kenyan SPA, marking another step closer to completion of the Transaction with Gulf Energy. For a total consideration of at least US$120 million, the Transaction supports our strategic priority to strengthen the balance sheet, with the first two payments totalling US$80 million expected before the end of the year,” said Richard Miller, Chief Financial Officer and Interim Chief Executive Officer, Tullow Oil Plc.
Under the deal, Gulf Energy is is expected to pay the total amount for consideration in installments with $40 million payment due on completion, $40 million payable at the earlier of Field Development Plan (FDP) approval or June 30, 2026 and a final payment of $40 million payable over five years from the third quarter of 2028 onwards.
In a statement, Miller says Tullow will also be entitled to royalty payments subject to certain conditions and will retain rights to return as a shareholder with up to 30pc stake in potential future development phases.
“Furthermore, we are pleased to retain a potentially material zero cost value option to participate in future development phases,” he added.
Tullow says the back-in right can be exercised if a third party investor participates in future development phases whether through a sale or farm-down of the Auron Energy E&P Limited’s interest in the assets.
Upon completion of the transaction, Gulf Energy will take full control of 463 million barrels of Block 2C resources as well as inherit all past and future decommissioning liabilities and all material past and future environmental liabilities as part of the transaction.
“We continue to advance plans to optimise our capital structure during 2025. Coupled with the sale of our Gabonese assets, the disposal of these non-core assets is expected to provide cash proceeds of US$380 million in 2025,” he added.
