Kosmos Energy has just announced the close of a transaction by which it has acquired an additional 18% in the Jubilee Field and an additional 11% in the TEN Fields in Ghana from Occidental Petroleum (OXY) for a price of $550m.
Both assets were previously chased by TotalEnergies as part of its broader acquisition of Anadarko Petroleum’s assets in Africa. However, the French major and OXY had mutually agreed in May 2020 to execute a waiver of the obligation to purchase and sell them, so that OXY could begin marketing their sale to other third parties.
Both fields are served by a different floating, production, storage and offloading (FPSO) vessel and are operated by Tullow Oil. Jubilee achieved first oil in 2020 and produced an average of 71,000 barrels of oil per day (bopd) in Q2 2021 with production currently increasing as a result of an ongoing drilling campaign. TEN achieved first oil in 2016 and produced an average of 37,000 bopd in H1 2021.
Source: PIAC
Kosmos Energy is familiar with both assets and has been present in the licences since the exploratory phase several years ago. Subject to pre-empty rights, the transaction could increase the company’s interests in Jubilee to 42.1% and in TEN to 28.1%.
Both projects have significant remaining potential and form the core of Tullow Oil’s growth and cash generation strategy this decade. “The acquired assets are expected to generate about $1bn of free cash flow by the end of 2026 at $65/bbl Brent,” Kosmos Energy said in a statement. The American independent also expects payback in less than three years if oil prices remain at an average of $65/bbl or above.
By simplifying the partnerships that run both fields, maintaining the pace of investments to develop additional reserves is also expected to be easier. A key focus will notably be on additional gas monetization from both fields in order to support Ghana’s gas-to-power industry.
Full details on both the Jubilee and TEN Fields Development are available in the “Projects” section within your Hawilti+ research terminal.