Tullow Oil has completed the 10 November sale of its assets in Uganda to French giant Total for $500 million.
Tullow will also receive $75 million when a final investment decision is taken on the development project, calculated to hold 1.7 billion bbl of crude oil. Contingent payments are payable after production begins if Brent crude prices rise above $62/bbl.
The completion of this transaction marks Tullow’s exit from its licenses in Uganda after 16 years of operations in the Lake Albert basin.
The deal is designed to strengthen Tullow’s balance sheet, as tumbling crude prices combined with exploration setbacks have created problems for the company.
In September, the company reported that it had lost $1.3 billion in the first 6 months of 2020 as falling oil prices forced it to write down the value of its assets. The deal cut Tullow’s net debt to $2.4 billion; it has $1 billion in cash.