Tullow Oil seeking acquisitions after slump in crude prices

Tullow Oil, the Africa-focused oil group that has been a perennial takeover target, is itself seeking acquisitions across the continent after crude prices slumped.

"We can go out and look for opportunities," chief executive Aidan Heavey told reporters in London on Thursday.

“M&A has been always part of what we do.”

Tullow is back to business as usual after six months of cost cuts, he said, following the drop in oil prices from more than $100 a barrel a year ago to about $65 currently. It reduced the exploration budget to $200 million this year, from $800 million in 2014 and more than $1 billion in both 2012 and 2013.

The company is seeking stakes in exploration acreage, known in the industry as farming in, from smaller firms struggling to drill for oil.

“It’s a buyer’s market for farming in,” Mr Heavey said.

Buying already discovered oil fields or whole companies is more difficult.

“You do not see distressed sales,” he said.

While Tullow has often relied on exploration, discovering oil in Ghana, it has also bought assets to grow. In 2004, it acquired Energy Africa for $570 million in a transformative deal, in 2010 it bought the Ugandan assets owned by Heritage Oil, and in 2012 it purchased Spring Energy Norway.

Bloomberg