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Tullow Oil PLC has announced plans to exit its operations in Kenya through a major transaction with Gulf Energy Ltd.The deal, valued at a minimum of $120 million, marks a step in Tullow’s strategy to streamline its portfolio and accelerate debt reduction.
In a statement released, Tullow said its wholly owned subsidiary, Tullow Overseas Holdings BV, has signed a heads of terms agreement with Gulf Energy to sell Tullow Kenya BV. The subsidiary holds Tullow’s entire working interests in Kenya.
The payment structure includes an initial $40 million upon completion of the deal, an additional $40 million due by 30 June 2026 or upon approval of the Field Development Plan (FDP) whichever comes first and a final $40 million to be paid over five years starting in the third quarter of 2028.
Tullow will also receive royalty payments under certain conditions and retains a back in right to re enter the project with a 30 percent stake in any future development phases, at no additional cost.
“This transaction is accretive to both equity and leverage and further accelerates Tullow’s deleveraging process,” the company said.
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The deal qualifies as a significant transaction under the UK Listing Rules (UKLR 7), which were updated in July 2024.
Full transaction documents are expected to be finalised soon, with further announcements anticipated.
