Tullow Oil - further asset sales

All,

Please refer to our unchanged analysis here.

Tullow have released a statement outlining two asset sales, both to Panoro (a small-cap Norwegian listed Oil Company). It is structured as two separate asset sales, one of which will require shareholder approval, but both assets are producing, non-operated assets in West Africa. The initial proceeds total $135m combined with a further $40m subject to performance and oil price evolution.

We had expected some asset sales later this year, but not of producing assets. The cash proceeds will aid Tullow with any negotiations with its creditors, but the amount is not materially high enough to enable to proceed without some form of debt extension.

Combined, the two assets were expected to generate 6,000 boepd in FY21 and had c. 20mboe in 2P reserves. Completion is expected in H1 2021. Post-transaction, Tullow will retain interests in producing assets in Gabon but have exited their interests in Equatorial Guinea. Note both of these assets are non-operated assets.

There is a conference call tomorrow morning at 9 am to give further information on the deal (and timeframe for shareholder approval). It is unlikely to reveal any update on negotiations with RBL lenders during the call.

Happy to discuss.

Tomás
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Tomás MannionTULLOW