RE: 40p23 Apr 2020 10:12
FT
Tullow to raise cash through $575m sale of stake in Ugandan project
Embattled oil group to sell asset to France’s Total at heavy discount. Nathalie Thomas in London. Troubled oil group Tullow is to sell its entire remaining stake in a Ugandan project to France’s Total for a deeply discounted $575m, just six months after a $900m deal involving the same scheme fell apart.
The company, which had been in a battle to secure its future long before Brent crude prices slumped to levels not seen since the late nineties this week, said it had struck a deal with Total over the Lake Albert Development project in Uganda, which would deliver $500m upon completion of the deal. A further $75m would be delivered when the partners in the scheme took a final investment decision.
The Uganda deal will deliver much-needed funds for Tullow, which is aiming to raise more than $1bn through asset sales, but the cover price marks a deep discount compared to a pact the company struck over Lake Albert back in 2017 with Total and Cnooc of China. Tullow had originally planned to reduce its stake in Lake Albert from around 33 per cent to 11 per cent via the previous $900m agreement, which fell apart in August last year following a tax row with Ugandan authorities.
However, the latest arrangement will deliver more cash for Tullow. Under the previous agreement, it would only have received $100m upon completion, $50m when the final investment decision was made and $50m when the first oil was produced. The remainder of the $900m would have funded its own costs towards developing the Lake Albert project.
Sign In
Follow the stocks
