By Oliver Griffin 
 

Tullow Oil PLC (TLW.LN) shares dropped Thursday after the company said that it has ended a farm-down agreement with Total S.A. (FP.FR) and CNOOC Ltd. (0883.HK) in Uganda.

The energy company said it has been unable to secure a further extension of the sales and purchase agreements with its joint-venture partners.

Tullow has tried unsuccessfully for some time to secure a farm-down of its stake in the Lake Albert project in Uganda. However, the plans had repeatedly been dogged by delays.

The company said the termination was because the parties had been unable to reach certain agreements on taxes with the government of Uganda.

Chief Executive Paul McDade said it is disappointing to report the end of the farm-out agreement at time when Tullow is making progress in other parts of its portfolio.

The company will now begin a new sales process to reduce its 33.33% operated stake in the Lake Albert project, which is expected to hit a peak production level of 230,000 barrels of oil a day.

Shares at 1012 GMT were down 3.7% at 207.50 pence.

 

Write to Oliver Griffin at oliver.griffin@dowjones.com; @OliGGriffin

 

(END) Dow Jones Newswires

August 29, 2019 06:32 ET (10:32 GMT)

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