Business
Sale of entire stake in Uganda to Total for $575m
Sale of entire stake in Uganda to Total for $575m.
About this update from Tullow Oil Plc
[{"type":"text","content":"\n \n \n RNS Number : 5703K\n Tullow Oil PLC\n 23 April 2020\n \n \n \n \n News Release\n \n \n \n \n \n Tullow agrees sale of its entire stake in the Lake Albert\nDevelopment Project in Uganda to Total for US$575 million in cash\nplus post first oil contingent payments\n \n \n \n \n \n \n 23 April 2020\n \n - \n Tullow Oil plc (Tullow) is pleased to announce that it has agreed the sale of its assets in Uganda to Total with an effective date of 1 January 2020.\n \n \n \n \n \n · \n Cash payments of US$500 million on deal completion and US$75 million at Final Investment Decision (FID)\n \n \n · \n Contingent payments linked to oil price to be paid after production commences\n \n \n · \n Principles on tax treatment of the Transaction agreed with Uganda Revenue Authority (URA) \n \n \n · \n Transaction marks first step in portfolio management programme to raise in excess of US$1 billion\n \n \n ·\n Proceeds to be used to reduce Tullow's net debt, strengthening the balance sheet and moving Tullow towards a more conservative capital structure\n \n \n ·\n Completion subject to a number of conditions, including approval by Tullow's shareholders, en\n tering into a binding tax agreement with the Government of Uganda and the URA that reflects the agreed tax principles \n and customary government and other approvals; completion of the Transaction is expected in the second half of 2020 \n \n \n \n \n \n \n \n Tullow and Total E&P Uganda B.V. (Total Uganda) have signed a Sale and Purchase Agreement (SPA), with an effective date of 1 January 2020 (the Effective Date), in which Tullow has agreed to transfer its entire interests in Blocks 1, 1A, 2 and 3A in Uganda and the proposed East African Crude Oil Pipeline (EACOP) System (the Uganda Interests) to Total Uganda for cash consideration of US$575 million (the Cash Consideration) plus potential contingent payments after first oil (the Transaction). Tullow is currently the operator of Block 2. Total Uganda is currently operator of Block 1 and Block 1A and CNOOC Uganda Limited (CNOOC) is operator of Block 3A.\n \n \n \n \n \n The Cash Consideration consists of US$500 million payable at completion and US$75 million payable following FID of the Lake Albert Development Project. Additional cash consideration may be received by Tullow in the form of...