Tullow Oil plc reported the sale of its 11% interest in the onshore M'Boundi field in Congo (Brazzaville) to the Korea National Oil Company (KNOC) for a total cash consideration of $435 million.
The deal, which will involve the sale of Tullow's subsidiary company - Tullow Congo Limited, is subject to partner pre-emption and approval from the government of Congo (Brazzaville) and has an effective date of 1 December 2007.
The M'Boundi field was discovered in May 2001 by Maurel and Prom and is one of the largest oil fields to be found onshore Africa in recent years. Through an active program of water injection and production optimization initiated by the operator, ENI, current production of approximately 37,000 bopd is expected to increase through 2008.
The M'Boundi field has been an important asset in Tullow's portfolio since the acquisition of Energy Africa in 2004. In the intervening period, the field has made a significant contribution to the Group's organic production and reserves growth. M'Boundi is now entering a new phase in its development at a time when Tullow is also looking to reallocate capital resources to projects where it has more material participation and influence. This transaction provides Tullow with the financial flexibility to advance its appraisal and development programs in Ghana and Uganda and to continue the development of its business.
Commenting today, Aidan Heavey, Chief Executive of Tullow said, "This is a very exciting time in Tullow's evolution with major work programs in progress to appraise and commercialize our assets in both Uganda and Ghana. The sale of M'Boundi, as part of our portfolio management strategy, provides Tullow with an opportunity to focus resources in core growth areas through monetizing a valuable non-core asset. M'Boundi is a quality asset and this is an excellent transaction for both Tullow and KNOC."
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