EO Group Ltd sells Ghanaian oil interests to Tullow Oil Plc
EO Group has sold its entire interest in Ghana’s Jubilee Oil Field to Tullow Oil plc.
The deal which was completed on 25th July 2011 has increased Tullow's interest in the West Cape Three Points licence offshore Ghana by 3.5 percent to 26.4 percent and its interest in the Jubilee Oil Field, which mainly operates by the company, by 1.75 percent to 36.5 percent. The transaction consists of EO Groups entire interests offshore Ghana, for a combined share and cash consideration of $305 million.
Aidan Heavey, Tullow's chief executive commented “This acquisition represents an excellent opportunity to extend our interest in these high-quality assets in Ghana, following our exploration and production successes over the last few years, which culminated in first oil in late 2010, this purchase further demonstrates Tullow's long-term commitment to Ghana and our belief in its significant remaining potential.”
Tullow indicated it would issue 10.14 million of its ordinary shares of 10 pence each to EO Group to satisfy about 216 million dollars of the consideration. The balance, which will include certain working capital adjustments, would be paid in cash.
An interesting aspect of the deal is that Tullow also indicated that the receipt of its shares as part of the consideration gives EO the opportunity to retain an indirect interest in the upside potential of all of its Ghanaian assets.
Jubilee, which is mainly operated by Tullow, is pumping now about 70,000 barrels of oil a day after production started last December.
The EO Group is wholly owned by two Ghanaians, Mr. George Yaw Owusu, a trained environmental scientist and worked in the energy industry for about twenty years and rose to the rank of Commodity manager for Shell oil Company in the U. S., and Dr. Kwame Bawuah- Edusei a physician trained in Ghana and specialized in family medicine in the U.S..
Tullow received legal advice from International law firm Freshfields Bruckhaus Deringer while EO Group was advised by law firm McGuireWoods. McGuireWoods is a globally recognised firm that employs approximately 900 lawyers in 19 offices worldwide.
Legal Adviser to EO Group:
Partner David L. Ronn commented:
“From the EO Group perspective, this was an important deal. The client was in a position where a number of complex issues needed to be resolved within strict time limits to get the deal ‘over the line’ in a way that would be satisfactory to all interested parties.”