Tullow adds $9M to Kenya exit deal, drops royalty and back-in rights
What's the deal? British oil and gas company Tullow OilDealroom has a profile for this one. Try Dealroom → has agreed to increase the value of its Kenya exit deal by an additional $9 million (Ksh1.16 billion). Its subsidiary Tullow Overseas Holdings BV reached the agreement with Auron EnergyDealroom has a profile for this one. Try Dealroom → E&P Limited, an affiliate of Gulf Energy Limited, which bought the shares in Tullow Kenya BV in 2025.
What changes? In exchange, Tullow will surrender its future Kenyan royalty payments and a back-in option linked to the assets. The previous deal let Tullow collect quarterly royalties of $0.5 per barrel on 80% of production, plus an option to take a 30% interest in future development phases.
Why now? Chief executive officer Ian Perks said the deal helps the company access cash sooner while cutting complexity. "By accelerating the receipt of $9 million from the sale of the shares in Tullow Kenya BV, we are securing near-term cash proceeds and simplifying our portfolio," he said.
The backstory: Tullow sold 100% of Tullow Kenya BV to Auron under an agreement signed in July 2025, transferring its interests in exploration Blocks 10BB and 13T in Turkana County. It discovered oil there in 2012, but the project stalled amid high development costs, infrastructure limits, and delays in reaching commercial production.
The terms: The original sale carried three $40 million tranches. Tullow received the first on September 25, 2025, and the second on March 9, 2026.
The third $40 million payment is unaffected by the new agreement. It is due no later than June 30, 2033, paid in quarterly instalments of $2 million from the third quarter of 2028, provided Dated Brent averages at least $65 per barrel in the preceding quarter.
Completion of the latest transaction and receipt of the extra funds are expected by July 17, 2026. Proceeds will go towards strengthening Tullow's balance sheet.
The signal: Tullow has classified its Kenyan operations as non-core and is shifting focus to producing assets in Ghana. Trading a stream of future, oil-price-dependent royalties for immediate cash underlines a debt-cutting strategy built on certainty over upside.
Read more: People Daily
Image credit: T100Timlen
