Kosmos Energy has confirmed that it is in “preliminary discussion” with Tullow Oil, an independent oil and gas exploration company, regarding a potential all-share takeover offer.
The announcement follows recent media reports speculating about the deal.
Tullow Oil, which has faced leadership changes following the resignation of CEO Rahul Dhir on 4 December, acknowledged the approach in a statement.
Kosmos, in turn, confirmed the talks, noting that it has until 5pm London time on 9 January 2025 to make a firm offer.
“There can be no certainty that any offer will be made, nor as to the terms on which any offer might be made,” the companies said in their press statement.
Further announcement will be made when necessary, the statement added.
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By GlobalDataThis proposed merger would combine two heavily indebted companies in the energy sector, continuing the trend of consolidation aimed at boosting efficiency and cutting costs.
If successful, the merger would create a company with a production capacity of more than 130,000 barrels of oil equivalent per day (boepd), according to their 2024 guidance.
The merged company would operate in key regions including Mauritania, Senegal, Ghana, Equatorial Guinea and the US Gulf of Mexico.
Founded in the late 1980s, Tullow Oil expanded rapidly in the 2000s, with acquisitions and discoveries such as Ghana’s Jubilee field.
The company reported production of 63,700boepd for the first half of 2024.
Kosmos Energy’s output for the third quarter stood at 65,400 barrels per day. Both companies are collaborators in Ghana’s Jubilee and Tweneboa Enyenra Ntomme oilfields.
In July 2024, Tullow Oil, with its partners, began production from the Jubilee South East project, part of the Greater Jubilee oil field offshore Ghana.
In October 2023, Kosmos Energy announced an oil discovery at the ultra-deep-water Tiberius exploration well in the US Gulf of Mexico.
Kosmos, as the operator of the well, holds a 33.34% working interest, while its partners, Occidental and Equinor, each own 33.33%.
