Gulf Energy, a subsidiary of Auron Energy E&P Limited, has initiated the acquisition process for Tullow Kenya’s entire asset portfolio following the signing of a successful purchase agreement valued at Ksh 15.5 billion (approximately US$120 million).
“We are pleased to announce the signing of the Kenyan Sale and Purchase Agreement (SPA), marking another step toward the completion of the transaction with Gulf Energy,” said Richard Miller, Chief Financial Officer and Interim Chief Executive Officer of Tullow Oil Plc.
“This transaction, for a total consideration of at least US$120 million, supports our strategic objective to strengthen our balance sheet. The first two payments, totaling US$80 million, are expected before year-end.”
Under the terms of the deal, Gulf Energy will make the total payment in installments:
- US$40 million upon completion,
- US$40 million payable at the earlier of the Field Development Plan (FDP) approval or by June 30, 2026,
- A final US$40 million to be paid over five years starting in the third quarter of 2028.
Tullow will also be entitled to additional royalty payments under certain conditions and retains a back-in right, allowing it to re-enter the project with up to a 30% stake in any future development phases.
This right can be exercised if a third-party investor becomes involved, either through a sale or farm-down of Auron Energy’s interest.
“Furthermore, we are pleased to retain a potentially material, zero-cost value option to participate in future development phases,” Miller added.
Upon completion, Gulf Energy will assume full ownership and operational control of the estimated 463 million barrels of resources in Block 2C.
The company will also take on all historical and future decommissioning and environmental liabilities associated with the assets.
