Tullow Oil announces merger with Capricon Energy

Tullow Oil PLC (“Tullow”) and Capricorn Energy PLC (“Capricorn”) are happy to announce that the boards of directors of both companies have come to an agreement on the parameters of a recommended all-share combination of Tullow and Capricorn (the “Combination”) to create the Combined Group.

 

Tullow is planning to acquire all of the issued and to be issued Capricorn Shares as part of the Combination, which will be carried out as part of a scheme of arrangement approved by the Court and carried out in accordance with Part 26 of the Companies Act. This is the current plan for how the Combination will be implemented.

 

According to the terms of the Combination, each shareholder of Capricorn will be entitled to receive the following in exchange for each of their Capricorn shares: 3.8068 new shares of Tullow Capricorn Shareholders will control approximately 47 percent of the Combined Group upon the conclusion of the Combination, while Tullow Shareholders will hold approximately 53 percent of the Combined Group.

 

Both Tullow and Capricorn’s boards of directors are of the opinion that the combination has a compelling strategic, operational, and financial rationale, and that it has the potential to offer substantial advantages to shareholders, host governments, and other stakeholders.

 

The Combination presents a one-of-a-kind opportunity to establish a leading energy company in Africa, which would be listed in London. This company would have the financial flexibility and human resource capability to access and accelerate near-term organic growth, add new reserves and resources in a cost-effective manner, generate significant future returns for shareholders, and pursue further consolidation. The Combined Group is dedicated to the creation of a sustainable future through the responsible development of oil and gas resources, working in close partnership and collaboration with joint venture partners and host governments to accomplish this goal. The boards of directors at both Tullow and Capricorn believe that the combination of their companies will result in the creation of a leading energy company in Africa. This new company will have a substantial and diverse asset base, as well as a portfolio of investment opportunities that will result in visible production growth.

 

The Combined Group offers shareholders a diversified pan-African upstream portfolio that is supported by low-cost producing assets, as well as a deep portfolio of incremental high return investment opportunities in Ghana, Egypt, Gabon, and Côte d’Ivoire. These opportunities are available to shareholders.

 

Capricorn’s Egypt portfolio offers a significant opportunity to deliver self-funded growth production through infill drilling and low-cost exploration to sustain the resource base over time, while also championing electrification and decarbonization initiatives. This opportunity presents itself as a significant benefit to Capricorn.

 

 

Additional growth and value creation opportunities are made available as a result of the significant resource development initiative in Kenya. Because of Guyana and Mauritania’s large prospective resource bases, there is a significant possibility for upside with only a little risk to capital. Pro forma reserves and resources of 343 million barrels of oil equivalent and 696 million barrels of oil equivalent, combined with 2021A production of 96 thousand barrels of oil equivalent per day, position the Combined Group as one of the largest listed independent energy companies with an emphasis on Africa as of today, Monday, June 6.

 

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