Tullow Oil unlikely bidder for Sabre’s Ghanaian assets, says Davy

By Giles Gwinnett — Oil major Tullow (LON:TLW) is unlikely to be interested in buying partner Sabre Oil and Gas’s interests in Ghana, says broker Davy.

It emerged yesterday that South Africa’s national oil company PetroSA was in talks to buy the Sabre assets.

Sabre has 4.05 per cent of the Deepwater Tano block, which Tullow operates (and owns 49.95 per cent), as well as the prolific producing offshore Jubilee field, in which Sabre has 1.7 per cent.

PetroSA’s interest in Sabre’s assets comes after Kosmos Energy announced in early May the termination of the acquisition of Sabre’s Ghanaian assets,” said Davy analyst Caren Crowley.Tullow has 35.5 per cent of Jubilee, while Anadarko and Kosmos Energy each hold 24.1 per cent, while the Ghana National Petroleum Corp (GNPC) holds 13.6 pct?

“In February 2012, Kosmos announced that it would acquire Sabre’s interest in Deepwater Tano for $365m, with an additional $45m contingent upon achieving certain milestones,” said the analyst.

But she believes Tullow is unlikely to be interested in acquiring Sabre’s interests?

“Tullow is operator of the Jubilee field and the Deepwater Tano block. If anything, Tullow would be interested in trimming its interest in Deepwater Tano from a current 49.95 per cent to a level similar to Tullow’s 35.5 per cent interest in Jubilee,” she noted

“While read-through valuations from any transaction for Sabre’s Ghanaian assets are tempting, they should be tempered by the minority interest Sabre holds in the Deepwater Tano block and, by implication, Jubilee

“Furthermore, Sabre would appear to be a willing seller,” she added in the note?

After it started in 2010, the Jubilee field became Ghana’s third-biggest export after gold and cocoa in 2011.

New discoveries in the Deep Water Tano block include Tweneboa and Enyenra as well as other clusters of discoveries such as Mahogany, Teak, Akasa and Banda.

GNPC and partners are reported to be investin g around $20 billion over the next decade to develop newly discovered fields.

Tullow shares were up 0.21 per cent today, to stand at 1,427 pence.

Source: Proactiveinvestors.co.uk