Tullow Oil shares rise 3% on €150m asset sale deal

Tullow Oil will use the sale proceeds to further pay down debt.

Shares in Tullow Oil rose by more than 3% on the Irish-founded exploration company agreeing the sale of stakes in some of its offshore African oil fields to Norwegian company Panoro Energy for up to $180m (€150m).

Tullow has agreed to sell stakes in offshore fields in Gabon and Equatorial Guinea and will use the sale proceeds to further reduce its $2.4bn debt.

"These are important, value-accretive deals for Tullow that will have a positive effect on our financial position as we look to further reduce our net debt and continue constructive discussions with our creditors,” said Tullow chief executive Rahul Dhir.

He said the sales were important in enabling Tullow to deliver $1bn of self-help measures over two years, through asset sales, exploration portfolio rationalisation and material cost savings.

The African sales – completion of which, along with receipt of funds, is expected during the first half of this year – will remove around 6,000 barrels of oil a day from Tullow Oil’s 2021 production.

Under the deal, Panoro Energy will pay Tullow an initial $140m in cash with an option for up to $40m more linked to oil prices and the performance of the assets.

• additional reporting Reuters