The acquisition was conducted by Tullow’s wholly owned subsidiary, Tullow Ghana Limited, on behalf of itself and its TGL joint venture partners. The completion of the transaction is scheduled for the end of the first quarter of 2027. The unit is owned and operated by Modec under a 10-year contract.
Tullow’s share of the net consideration, approximately $125.6m, is equivalent to approximately one year of current net lease costs and will be funded by in-year cash flow from TEN.
Tullow’s partners in the TGL joint venture are the Ghana National Petroleum Corporation, GNPC Explorco, Kosmos Energy, and PetroSA.
The FPSO is the production facility for the TEN fields on the Deep Water Tano Block, offshore Ghana. Following completion of the transaction, Tullow intends to maximise operations with the adjacent Jubilee Field and drive further cost efficiencies, which will underpin further longer-term development of the TEN and Jubilee fields.
“The acquisition of the FPSO will deliver material cost savings by removing the annual lease cost and resetting our fixed costs at the TEN fields. By extending the economic life and removing the annual lease cost, we will create additional free cash flow potential for the company beyond 2027,” said Ian Perks, CEO of Tullow.
The FPSO was built by Modec, and made first oil in August 2016. It is the second Modec FPSO provided to Tullow in Ghana, following the FPSO Kwame Nkrumah, which started its oil production in 2010 on the Jubilee field.