Tullow shareholders back €710m share sale

Oil group in process of CEO handover of Heavey to McDade as it faces debt refinancing

Tullow Oil received backing from its shareholders at a meeting in London on Wednesday to complete a £607 million (€710 million) share sale to bolster its finances as it seeks to refinance much of its debt with lenders.

More than 80 per cent of shareholders voting on the company’s plans to sell stock to existing investors, or what’s known as a rights issue, backed three resolutions on the transaction at the meeting, Tullow said in a statement.

Investors will be able to start trading rights to participate in the deeply-discounted share sale from Thursday, with the final date for subscriptions for the new stock set for April 24th.

The new shares are being offered at £1.30 each, more than £1 below where the stock is currently trading in the market.


Eventful nine months

The oil company unveiled plans to raise the money on St Patrick's Day. Founding chief executive of three decades Aidan Heavey will hand over the reins later this month to his chief operating officer, Paul McDade.

The share sale caps off an eventful nine months for Tullow, which has seen the company's TEN project off Ghana begin to pump oil for the first time, while its flagship Jubilee project, also off Ghana's coast, suffered technical issues on its floating production, storage and off-loading vessel. The company also agreed in recent months to sell 21.6 per cent of its 33 per cent interest in the so-called Lake Albert Development Project in Uganda to French group Total and Chinese oil giant CNOOC for a total consideration of $900 million.

Tullow said the equity raised will help it explore for more fuel around the Jubilee and TEN fields, as well as Kenya and other prospects across its portfolio. It would also allow the company to “take advantage of other opportunities that industry conditions offer,” it said.

The group, which had $4.8 billion of net debt at the end of last year, faces talks this year with its lenders on refinancing more than $3 billion of bank facilities.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times