Tullow Oil is set to increase its stake in the Jubilee and Ten fields in Ghana following the exercising of its right of pre-emption related to the sale of Occidental Petroleum’s interests in the fields to Kosmos Energy.

Tullow has pre-emption rights in respect of the 11.05 per cent participating interest within the offshore DWT block indirectly acquired by Kosmos Energy as a result of its acquisition of Anadarko WCTP Company announced last month.

Under the deal Tullow is set to increase its share in the offshore DWT block by 7.7 per cent for around $150 million, bringing it to a total of 54.8 per cent. This would increase Tullow’s equity interests in the Jubilee and Ten fields to 38.9 per cent and 54.8 per cent respectively.

The additional equity could increase group daily production by 10 per cent and help to accelerate debt-reduction by generating more than $250 million in incremental free cash flow at $65/bbl for Tullow between 2022 and 2026.

The deal will be funded through existing resources.

The transaction remains subject to finalising definitive agreements with Kosmos Energy/Anadarko WCTP Company and must also be approved by the government of Ghana.

“This is a value accretive, self-funded opportunity for the group which will increase Tullow’s daily group production by circa 10 per cent and generate additional cash flow to help accelerate debt-reduction,” said Rahul Dhir, chief executive of Tullow Oil.

“Increasing our operated stakes in the Jubilee and Ten fields underscores our commitment to investing in and delivering our Ghana value maximisation plan. This opportunity fits well with our strategy to focus on maximising value from our producing assets. We look forward to constructive conversations with our JV partners and the government of Ghana.”