Exercise of Pre-emption Right

RNS Number : 6796F

Tullow Oil PLC

18 January 2010

 



News Release 

Tullow exercises pre-emption right on proposed sale of Heritage's Ugandan assets 

17 January 2010 - Tullow Oil plc ("Tullow") announces that on Sunday, 17 January 2010, its subsidiary, Tullow Uganda Limited ("Tullow Uganda"), exercised its right of pre-emption in respect of the proposed sale by Heritage Oil & Gas Limited ("HOGL") of its 50% interest in Blocks 1 and 3A in Uganda. 

Pursuant to its right of pre-emption, Tullow Uganda will enter into a Sale and Purchase Agreement (“SPA”) with HOGL, a subsidiary of Heritage Oil plc (“Heritage”). On 18 December 2009, Heritage announced that the consideration for the transaction comprises US$1.35 billion cash and a further contingent, deferred consideration of either US$150 million cash or an interest in a mutually agreed producing oil field independently valued at a similar amount. A syndicate of Tullow’s core relationship banks has provided the banking facilities required to enable Tullow to exercise its right of pre-emption.

Completion of the SPA is subject to certain conditions which include approval by Heritage shareholders at a meeting scheduled for 3pm (GMT) on 25 January 2010 and receipt of necessary consents from the Ugandan Government. 

In parallel with exercising its pre-emption right, Tullow has been running a transparent farmout process which has attracted a significant amount of interest from major international and national oil companies. The process is now well advanced and potential partners are supportive of the Group's decision to pre-empt.

Commenting today, Aidan Heavey, Chief Executive, said:

"Over the last six years, Tullow and Heritage have invested over US$700 million in the Lake Albert Rift basin in drilling 27 wells to prove up over 700 million barrels of oil and identify over 1.5 billion barrels of potential yet to be explored.

"Tullow is committed to retaining a material stake in Uganda and to continue to invest for the long term. As we enter the development phase we are working closely with the Ugandan government to introduce a mutually beneficial partner with downstream expertise who is aligned with this long term approach. 

"The pre-emption of the Heritage transaction, and completion of Tullow's farmdown process, is an excellent opportunity to deliver an accelerated basin-wide development plan best suited to Government needs and to optimise value for all stakeholders."

Conference Call

Aidan Heavey (CEO) will host an analyst conference call at 8.30am on Monday 18 January. Please dial in 10 minutes before the start time. A replay facility will be available from 12pm. The details for accessing the live call and the replay are as follows:

Live Event		Replay Facility available from 12 pm
UK Participants	020 7806 1967	UK Participants	020 7111 1244
Irish Participants	1 486 0916	Irish Participants	1 486 0902
Other Participants	[phone]	Other Participants	[phone]
Access Code	9348513	Access Code	9348513#

FOR FURTHER INFORMATION CONTACT:

Tullow Oil plc  ([phone]) Aidan Heavey Ian Springett Chris Perry

Citigate Dewe Rogerson  ([phone])  Martin Jackson George Cazenove

Murray Consultants  ([phone])  Joe Murray  Ed Micheau

Notes to Editors

Tullow is a leading independent oil & gas, exploration and production group, quoted on the London and Irish Stock Exchanges (symbol: TLW) and is a constituent of the FTSE 100 Index. The Group has interests in over 85 exploration and production licences across 23 countries and focuses on four core areas: Africa, Europe, South Asia and South America.

In Africa, Tullow has production in Gabon, Côte d'Ivoire, Mauritania, Congo (Brazzaville) and Equatorial Guinea and two large appraisal and development programmes in Ghana and Uganda. Tullow also has exploration interests in Gabon, Côte d'Ivoire, Liberia, Sierra Leone, Mauritania, Senegal, Congo (DRC), Tanzania, Madagascar, Namibia and Angola.

Tullow's European interests are primarily focused on gas in the UK Southern North Sea where it has significant interests in the Caister-Murdoch System and the Thames area. The company also has interests offshore the Netherlands and Portugal. 

In South Asia, Tullow has exploration and production in Pakistan and Bangladesh. In South America, Tullow has exploration interests in Guyana, French Guiana and Suriname. 

For further information please refer to our website at www.tullowoil.com.

 

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