0
0 News Ghana, Latest Updates and Breaking News of Ghana, News Ghana, https://newsghana.com.gh/kosmos-energy-abandons-pursuit-of-tullow-oil-after-talks-trigger-tullow-share-drop/
Kosmos Energy has officially walked away from its bid to acquire Tullow Oil, a decision that has sent Tullow’s shares plummeting by 10%.
The announcement came just days after the two companies had disclosed they were in early-stage talks for a potential merger aimed at creating a major oil producer focused on West Africa.
The withdrawal of Kosmos Energy also caused a 13% jump in its stock during pre-market trading. Had the deal gone through, the combined entity would have had an estimated production of over 130,000 barrels of oil equivalent per day (boepd) in 2024, with operations spanning across Mauritania, Senegal, Ghana, and Equatorial Guinea, in addition to the US Gulf of Mexico.
James Hosie, a research analyst at Shore Capital Stockbrokers, noted that while there were operational synergies to be gained from the merger, the deal would have required approval from the Ghanaian government and both companies’ creditors, a process that could have proven challenging.
Tullow Oil, which is dealing with significant debt, stated that its board remained confident in the company’s ability to optimize its capital structure without the need for the merger. The company also revealed earlier this month that its CEO, Rahul Dhir, would step down in 2025, a factor that Hosie suggested could have made the deal discussions appear somewhat opportunistic.
Kosmos Energy had until January 9, 2025, to make a firm offer for Tullow Oil, but has indicated that it retains the right to reconsider its position should conditions change.
News Ghana, Latest Updates and Breaking News of Ghana, News Ghana, https://newsghana.com.gh/kosmos-energy-abandons-pursuit-of-tullow-oil-after-talks-trigger-tullow-share-drop/
