Tullow Oil (LON: TLW) has announced the sale of majority stakes, in two southern North Sea assets, to Faroe Petroleum Ltd. The sale of 53.1% in Tullow’s Schooner interest (currently 93.1%) and 60% of its Ketch asset which is currently owned outright is expected to bring Tullow the equivalent of GBP £44.8m (US$75.6m) plus royalties on future Schooner developments. The agreement states GBP £33m (US$58.8m) to paid on completion of sale with the remainder to be paid at agreed production milestones. Faroe Petroleum Ltd will take control over the day to day production and management of both platforms.
Both Schooner and Ketch assets feed into the ConocoPhillips Caister Murdoch (CMS) infrastructure to be pumped ashore to the Theddlethorpe Gas Terminal (TGT), Lincolnshire UK- also operated by ConocoPhillips. The Schooner sits approximately 93 miles (150km) north east of TGT whilst the Ketch sits 100 miles (160km).
The sale is seen as Tullow Oil refocusing their objectives on emerging markets, mainly Africa, where it is seen at its strongest and where it has had numerous commercially viable finds over past few years.
Although the emerging African markets are seen as risky by some, Tullow’s share price rose in trading after the sale of both stakes was announced. This can only be seen as a good thing since it currently stands at around 66 percent of where it was just over a year ago, and after a 2.5 percent drop on 25th April 2014 after it announced its latest unsuccessful Mauritania exploratory well.
The Jubilee field, Tullow’s flagship project, offshore Ghana which is well on track to hit its production forecast of 100,000 barrels of oil equivalent, is hoped to steady the year long decline in Tullow’s share price.
BG Group continues to market and seek buyers for the remainder of its Southern North Sea assets, which cover both UK and Dutch sectors, as it continues to raise money and strengthen its standing in its African markets.Last updated on 06:38PM - 06/05/14