Page 9 - AfrOil Week 05 2020

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An African option for Tullow?
REGIONAL
INDUSTRY observers have been contemplating the possibility that an African investor may seek to bid for control of Tullow Oil, an Anglo-Irish independent that is active in Guyana and several African countries.
Speculation about a buy-out began last December. At that time, Samuel Dos- sou-Aworet, a businessman from Benin with extensive experience in the African oil and gas sector, said he had increased his stake in Tullow to slightly over 7%.
Dossou-Aworet has sought to dispel talk about a takeover. In December, he said he had no immediate plans to buy more stock in Tullow. He also stated that he wanted to act as an advisor to the company rather than control it.
Since then, though, he has reportedly pur- chased additional shares. On January 29, the Irish Times reported that he now held 9.67% of Tullow’s equity.
Until recently, the businessman owned just 4% of Tullow’s stock. He acquired the stake in 2004, when he accepted it as partial payment for the sale of Energy Africa, a South African company, to Tullow. e latter paid $500mn for Energy Africa, in a deal that allowed it to gain access to hydrocarbon-bearing sites in several African countries.
The new portfolio effectively doubled Tullow’s size. It included the Jubilee and TEN sites o shore Ghana, which are now the compa- ny’s largest productive assets.
e acquisition has not been an unalloyed blessing, though, as Jubilee and TEN have become sources of frustration for Tullow. is is partly the result of a decline in reserves at Enyenra (a section of the TEN block) and partly the consequence of a drop in the volumes of gas requested for delivery by Ghana National Gas Co. (GNGC). These developments have led Tullow to revise its production forecasts downward.
is decision, along with disappointments and setbacks in Guyana, Kenya and Uganda, have pulled Tullow’s share prices down consid- erably. According to the Irish Times, however, talk about a possible takeover by Dossou-Aworet has helped raise that gure by up to 8.5%.™
Africa Oil uses BTG Pactual dividend to pay down POGBV loan
Heading for a buy-out? (Photo: Tullow Oil)
NIGERIA
CANADA-BASED Africa Oil has started repay- ing the loan it took out to nance its acquisition of Petrobras Oil and Gas BV, now known as Prime Oil and Gas BV (POGBV).
In a statement dated February 4, the com- pany said it had received its rst dividend pay- ment from POGBV. e payment amounted to $62.5mn, or 50% of the entire sum distributed by POGBV. is is in line with Africa Oil’s 50% stakeinPOGBV,itsaid.
All of the dividend funds will be used to pay down the $250mn credit that BTG Pactual extended to help Africa Oil buy the POGBV stake, the statement said. “ e company will apply this amount and any future dividends in priority towards the repayment of its $250mn
POGBV acquisition loan, in order to accelerate the repayment of the loan principal amount,” it explained.
Keith Hill, the CEO of Africa Oil, noted that his company had received the dividend shortly a er wrapping up its purchase of the POGBV stake. “We are very pleased to update our investors with news of the maiden dividend from our Nigerian asset, less than a month a er closingtheacquisitionofa50%shareholdingin POGBV,” he said. “We plan to release our 2020 guidance, including an estimate of cash ows nettoourinterestinPOGBV,withourfull-year results on or about February 28, 2020, and to le the statement of reserves e ective year-end 2019 by March 31, 2020.”
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