Tullow Oil has finally reached a deal to sell its assets in Kenya to Gulf Energy Ltd. Following the announcement on 15th April 2025, Tullow Oil plc has announce that its subsidiary, Tullow Overseas Holdings BV, has signed a sale and purchase agreement (SPA) with Auron Energy E&P Limited, an affiliate of Kenya’s Gulf Energy Ltd.
The assets comprise all of Tullow’s working interests in Kenya, where significant discovered oil resources are progressing towards development in the South Lokichar Basin in Kenya. Since 2011 Tullow has undertaken exploration and appraisal of the assets as part of the longer-term development objective.
Tullow Kenya BV Managing Director, Mr Madhan Srinivasan, said the signing is a milestone in the ongoing transaction and brings the sale closer to completion. In the transaction, Gulf Energy Ltd shall act as guarantor for the purchaser for the sale and purchase of 100% of the shares in Tullow Kenya, which holds Tullow’s entire working interests in Kenya for a minimum cash consideration of US$120 million, subject to customary adjustments.
The consideration will be split into a US$40 million payment due on completion, US$40 million payable at the earlier of Field Development Plan (FDP) approval or 30th June 2026, and US$40 million payable over five years from the third quarter of 2028 onwards.
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In addition, Tullow Oil will be entitled to royalty payments subject to certain conditions. Tullow also retains a no cost back-in right for a 30% participation in potential future development phases. This right can be exercised if a third-party investor participates in future development phases whether through a sale or farm-down of the Purchaser’s interest in the assets.
“We are pleased to announce the signing of the Kenyan SPA (sale and purchase agreement), marking another step closer to completion of the Transaction with Gulf Energy,” said Richard Miller, Chief Financial Officer and Interim Chief Executive Officer, Tullow. “For a total consideration of at least US$120 million, the Transaction supports our strategic priority to strengthen the balance sheet, with the first two payments totalling US$80 million expected before the end of the year.”
Coupled with the sale of our Gabonese assets, the disposal of these non-core assets is expected to provide cash proceeds of US$380 million in 2025, said Mr Miller.
He said the transaction is in line with Tullow’s strategy of focusing on high-margin, self-funded production with strong cash flows and positions the Group well to finalise the optimisation of its capital structure in 2025 and accelerate deleveraging.
“Revised portfolio of assets will enable Tullow to leverage its technical skills and focus on more material positions in key fields to grow its reserve base,” he said. “It provides strong foundations for organic growth within the core portfolio and inorganic growth opportunities, with a focus on deepwater operated positions in West Africa.”
Net proceeds from the Transaction will be used to strengthen Tullow’s balance sheet by materially reducing Tullow’s net debt and is therefore expected to reduce the risk associated with a holistic debt refinancing expected in 2025.
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