BW Offshore: Dussafu – Tullow back-in right
As announced on 19 March 2019, Tullow Oil Gabon S.A. ("Tullow") has exercised its 10% back-in right to the Dussafu production sharing contract (“PSC”).
Tullow and the existing parties to the Dussafu production sharing contract (jointly, the "Parties") have on 17 December 2019 entered into a deed of novation and amendment by which Tullow became party to the Dussafu joint operating agreement. Following the completion of the back-in right, the interests of the Parties in the PSC will be: BW Energy (73.5%), Tullow (10%), Gabon Oil Company (9%) and Panoro (7.5%).
The exercise of the back-in right was subject to Tullow reimbursing the other Parties for its share of historic costs related to the Dussafu development. The total amount has been disputed by the Parties. However, the Parties have now reached an agreement for the undisputed share of the costs, representing a total of USD 40.9 million as at the end of October 2019. The net amount payable by Tullow to the existing partners is USD 19.8 million after adjusting for Tullow’s net lifting entitlement since the commencement of oil production in September 2018 and some surplus cash-calls made on their behalf. The net amount payable to BW Energy is USD 15.9 million.
Negotiations are ongoing to resolve the disputed costs, which amount to an additional USD 18.7 million. If an agreement is not reached then the dispute will be submitted to a simplified arbitration. BW Energy’s share of the disputed costs is 81.667%.
For further information, please contact:
Knut R. Sæthre, CFO BW Energy, +47 91 11 78 76
Ståle Andreassen, CFO BW Offshore, +65 97 27 86 47
About BW Offshore:
BW Offshore is a leading provider of floating production services to the oil and gas industry. The company also participates in developing proven offshore hydrocarbon reservoirs. BW Offshore is represented in all major oil and gas regions world-wide with a fleet of 15 owned FPSOs. The company has more than 30 years of production track record, having executed 40 FPSO and FSO projects. BW Offshore is listed on the Oslo Stock Exchange.
About BW Energy
BW Energy Ltd. (BWE) is a differentiated E&P company with production, development and exploration licenses in West Africa and Brazil, targeting proven reservoirs by redeployment of existing FPSOs for highly efficient field developments and low-risk production growth. BWE holds a 73.5% working interest in the Dussafu Marin Block offshore Gabon and a 100% interest in Maromba field offshore Brazil. BWE is 68.6% owned by BW Offshore Limited, 30.5% by BW Group Limited and 0.9% by Arnet Energy Pte Ltd.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.