Kosmos Energy and Ghana National Petroleum Corp. (GNPC) agreed to acquire interests in Tullow-operated Jubilee and TEN fields offshore Ghana from Occidental Petroleum Corp., Houston, for $750 million. Combined, the assets had second-quarter 2021 net production of 22,000 boe/d.
In a $550-million deal that closed Oct. 13, Kosmos gained an additional 18% interest in Jubilee field and an additional 11% interest in TEN fields. The deal increases Kosmos’ interests in Jubilee to 42.1% and in TEN to 28.1%. Consideration due to OXY at completion was about $460 million after closing adjustments, Kosmos said in a release Oct. 13.
The transaction is subject to a 30-day pre-emption period, which, if fully exercised, could reduce Kosmos’ ultimate interest in Jubilee by 3.8% to 38.3%, and in TEN by 8.3% to 19.8%, the company said. Prior to closing the transaction, OXY resolved certain historical tax claims related to the sold interests, both companies said in separate releases, though no details were provided.
The additional Ghana interests are expected to generate around $1 billion of incremental free cash flow by end 2026 at $65 Brent with upside given current prices, said Andrew G. Inglis, chairman and chief executive officer of Kosmos.
Using Kosmos’ year-end 2020 reserves report, prepared by independent reserve auditor Ryder Scott, estimated 2P reserves acquired as part of the deal were about 104 MMboe at yearend 2020. The acquired assets are currently producing about 17,000 boe/d net and are expected to generate about $325 million of EBITDAX in 2022 at $65 Brent, the company continued.
The transaction creates a “simplified and aligned partnership in both the Jubilee and TEN fields,” Kosmos said.
The $200-million sale to GNPC is expected to close in this year’s fourth quarter. GNPC currently holds 13.64% interest in Jubilee and 15% interest in TEN. Petro SA is the remaining partner in both fields.
In June, OXY inked a deal to sell certain Permian basin acreage for $508 million, bringing its post-Colombia divestiture total to over $1.3 billion of the planned $2-3 billion. Since August 2019, the company has divested more than $9 billion of assets (OGJ Online, June 11, 2021).