Tullow Oil PLC Termination of farm-down agreement in Uganda (5693K)
August 29 2019 - 6:00AM
UK Regulatory
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RNS Number : 5693K
Tullow Oil PLC
29 August 2019
News Release
THIS PRESS RELEASE CONTAINS INSIDE INFORMATION
Termination of farm-down agreement with Total and CNOOC in
Uganda
29 August 2019 - Tullow Oil plc ("Tullow") announces it has been
informed that its farm-down to Total and CNOOC will terminate at
the end of today, 29 August 2019, following the expiry of the Sale
and Purchase Agreements (SPAs).
Tullow has been unable to secure a further extension of the SPAs
with its Joint Venture Partners, despite previous extensions to the
SPAs having been agreed by all parties. The termination of this
transaction is a result of being unable to agree all aspects of the
tax treatment of the transaction with the Government of Uganda
which was a condition to completing the SPAs. While Tullow's
capital gains tax position had been agreed as per the Group's
disclosure in its 2018 Full Year Results, the Ugandan Revenue
Authority and the Joint Venture Partners could not agree on the
availability of tax relief for the consideration to be paid by
Total and CNOOC as buyers.
Tullow will now initiate a new sales process to reduce its
33.33% Operated stake in the Lake Albert project which has over 1.5
billion barrels of discovered recoverable resources and is expected
to produce over 230,000 bopd at peak production. The Joint Venture
Partners had been targeting a Final Investment Decision for the
Uganda development by the end of 2019, but the termination of this
transaction is likely to lead to further delay.
Paul McDade, Chief Executive Officer, commented today:
"Tullow has worked tirelessly over the last two and a half years
to complete this farm down which was structured to re-invest the
proceeds in Uganda. Whilst this is a very attractive low-cost
development project, we remain committed to reducing our operated
equity stake. It is disappointing to report this news at a time
when we are making so much progress elsewhere towards the growth of
the Group with our recent oil discovery in Guyana and the first
export of oil from Kenya."
FOR FURTHER INFORMATION CONTACT:
Tullow Oil
plc
(London)
(+44 20 3249
9000)
Julia Ross
Nicola Rogers
George Cazenove
Notes to Editors
Tullow Oil plc
Tullow is a leading independent oil & gas, exploration and
production group, quoted on the London, Irish and Ghanaian stock
exchanges (symbol: TLW). The Group has interests in 80 exploration
and production licences across 15 countries which are managed as
three business delivery teams: West Africa, East Africa and New
Ventures.
Follow Tullow on:
Twitter: www.twitter.com/TullowOilplc YouTube: www.youtube.com/TullowOilplc
Facebook: www.facebook.com/TullowOilplc LinkedIn: www.linkedin.com/company/Tullow-Oil
Website: www.tullowoil.com
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END
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