Tullow Oil has confirmed
its merger with Capricorn Energy, a fellow British oil and gas company that
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 noted that: “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.
“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,’ it
added.
The statement added that the move delivers 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 $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.
Source:citinewsroom