Deal Insight

Tullow and Capricorn agree merger

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13 June 2022

Tullow and Capricorn agree merger

Report summary

London-listed stalwarts Tullow Oil and Capricorn Energy have reached an all-share merger agreement. The deal will consolidate the companies' Africa focused businesses, combining Tullow's oil-weighted assets mainly in Ghana and Capricorn's gas-weighted portfolio in Egypt. The trend of consolidation has been gathering pace lately and we think there's clear logic to this tie-up. Tullow's position in Ghana is generating substantial cash in the current price environment and it has a material development opportunity in Kenya; but managing its high leverage ratio (over 100%) has been the primary focus. Capricorn brings a strong balance sheet with a net cash position of around US$700 million; but beyond shareholder returns it has struggled to deploy capital to growth opportunities and fixed gas pricing in Egypt has weighed on its market performance.

Table of contents

  • Executive summary
  • Transaction details
    • Tullow
      • Ghana
      • Cote d'Ivoire
      • Gabon
      • Kenya
      • Exploration assets
    • Capricorn
      • Egypt
      • Mexico
      • Exploration assets
    • Shareholder approval
    • Financial outlook
    • Emissions
    • Upsides
    • Risks
    • Combined balance sheet strength
    • Scale and diversity
    • Cultural fit
    • What next?
  • Oil & gas pricing and assumptions

Tables and charts

This report includes 9 images and tables including:

  • Tullow and Capricorn working interest production
  • Deal analysis: Table 1
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2
  • Deal analysis: Table 2
  • Tullow and Capricorn cash flow and capex
  • Tullow and Capricorn absolute emissions and intensity
  • Benchmark: peer group production
  • Upstream assets: Table 1

What's included

This report contains:

  • Document

    Tullow and Capricorn agree merger

    PDF 907.68 KB