Tullow Oil’s share price rallies after Africa Oil sells its assets to Moeller-Maersk
Tullow Oil's share price is leading the FTSE 350 today after its partner in parts of Africa sold stakes in some of its assets to Moeller-Maersk.
In late morning trading Tullow Oil's share price was 18.56 per cent up at 258.55p per share.
Maersk agreed to buy African Oil assets in Kenya and Ethiopia, with an upfront farm-in payment of $365m (£241m), including exploration costs. Future contingent payments of up to $480m will be made by Maersk for the Lokichar project in Kenya, the company said in a statement.
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“This is a big vote of confidence on the quality and materiality of these assets,” FirstEnergy Capital analysts said in a note.
The announcement is “very positive” as it provides an “imminent cash injection” and eliminates any funding concerns.
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“Maersk Oil is committed to pursuing profitable growth by focusing on expanding within our core geographies. In addition we are rebuilding the exploration business with new acreage positions and pre-development discoveries to balance the risk profile in our portfolio.
"This agreement with Africa Oil is an example of this,” said Maersk Oil chief executive Jakob Thomasen.