Tullow to merge with Capricorn to form leading African energy company

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Tullow Oil and Capricorn Energy have proposed to merge to form a leading energy company in Africa.

Chief Executive Officer of Tullow Oil, Rahul Dhir said in a July operational update that the company is preparing a circular and prospectus for its shareholders in connection with the proposed merger with Capricorn.

A shareholder vote is expected toward the end of the year.

Tullow announced the proposed merger in June. It said it agreed with Capricorn on the terms of an all-share merger. The new company would have a material and diversified asset base and a portfolio of investment opportunities delivering visible production growth, Tullow said.

It added, “This proposed merger will realise meaningful cost synergies and deliver a combined group with robust cash generation and a resilient balance sheet. It will also have a sustainable capital returns programme and a deep commitment to environmental stewardship, social investment, development of local content and its national workforces.”

Both assets have operations in multiple regions of the world. Of note, the merged company would have assets in Guyana because, while it is Africa focused, Tullow partly owns two blocks offshore Guyana.

Tullow has a 60% operated interest in the Orinduik Block and a 37.5% non-operated interest in the Kanuku Block.

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