Tullow Oil is reported to have signed a two separate sale and purchase agreement for some of its non-operated offshore oil fields in Equatorial Guinea (The EG Transaction) and the Dussafu assets in Gabon (The Dussafu Transaction), with Panoro Energy.

The move according to sources is to help reduce Tullow’s debt pile of about $2.4 billion, about four times its current market value of $577 million.

Tullow is said to be already discussing with its lenders to restructure its debt to narrow its focus to its operating fields in Ghana.

Per the agreement, an initial amount of $140million will be paid with an option of $40 million, which will be tied to oil prices and the performance of the acquired assets.

Panoro plans to finance with a $70 million private equity placement and $90 million in debt underwritten by commodities trader Trafigura.

The deal covers a 14.25% stake in Block G offshore Equatorial Guinea and 10% in Gabon’s Dussafu Marin Permit, in which Panoro already has some presence.

For Panoro, this deal adds 6,900bbl/d to their net production, which is quadrupling to their current production. This projected production numbers will enable Panoro to start paying dividends in 2023.

According to the CEO of Panoro, John Hamilton, the company will continue to look at acquisition opportunities of this sort in the future.

During an interview with Reuters, Panoro CEO said, “There are a number of companies, including the oil majors, who are busy looking to rationalize their portfolios in some of these countries and we do see growth opportunities in these areas.”

The agreement is seen as a strategic business decision to enable both companies execute their respective business growth plan.

Panoro Energy ASA is an independent E&P company listed on the Oslo Stock Exchange and based in London.

They have exploration and production assets in Africa with oil production from fields in Tunisia, Gabon and Nigeria.