Part of Tullow Oil’s rig
TULLOW OIL has approved its merger with Capricorn Energy, a British oil and gas company, a release issued by the oil giant has said.
This collaboration offers the combined entity oil reserves in excess of a billion barrels across multiple countries in Africa.
According to the company, it is intended that the combination will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act, where Tullow will acquire all of the issued and to be issued Capricorn shares.
A statement from Tullow emphasised, “The boards of directors of Tullow Oil Plc (Tullow) and Capricorn Energy Plc (Capricorn) are pleased to announce that they have reached agreement on the terms of a recommended all-share combination of Tullow and Capricorn (the Combination) to create the combined group.”
It also indicated that “This is a merger of equals creating a leading African energy company with a material and diversified asset base and a portfolio of investment opportunities delivering visible production growth. Capricorn Shareholders to receive 3.8068 new Tullow shares for each Capricorn share held, with Capricorn shareholders to own 47% and Tullow shareholders to own 53% of the combined group on completion.”
The statement continued that the move offers a combined group with robust cash generation and a resilient balance sheet, realising pre-tax net cash cost synergies of $50 million per annum.
It also establishes the basis for a sustainable shareholder returns programme, with a base annual dividend of US$60 million and is committed to reducing emissions from within its operating assets, targeting net zero Scope 1 and Scope 2 emissions by 2030, and continuing a proven track record of safe, low-cost operations.