Tullow is a $1bn buyer and not for sale - Heavey
Published 02/05/2015 | 02:30
The chief executive of Irish-listed Tullow Oil said that the company has $1bn (€890m) available to spend on acquisitions and separate uses if needed.
Speaking at a shareholder meeting for the firm yesterday, Aidan Heavey said the oil and gas explorer is looking at picking up assets in Africa, where it conducts the vast majority of its business.
"We have the capacity to do a deal. We've gone through all the restructuring of the business, we have a lot of capacity now. We have over €1bn of capacity," he said.
Although he said he did not foresee all of that being spent on acquisitions, he added: "If you look at our strategy it has always included acquisitions. It's something that we do.
"If you look at our history, it has always been that when the oil industry goes into a downturn, we have always been aggressive in moving forward and that's when the opportunities turn up.
"The main thing that you go after is licences and exploration blocks and it is very much a buyer's market for those assets."
He said that the firm has a "constant stream" of assets that it is evaluating. He said that any deals the firm would be looking at would be located in Africa, although he did not elaborate further. Tullow has a large presence in Ghana, Kenya and Uganda.
He added that the firm "hopes to complete some deals this year."
Tullow has seen itself touted as a potential acquisition target for larger rivals given the recent collapse in oil prices. However, Mr Heavey firmly ruled out any talk of a sale.
When asked whether the company has received any approaches, Mr Heavy said: "No. They don't even bother. We're in so many African countries, you'd have to negotiate with every single government. It's well known in the industry Tullow can't be taken over."
Tullow's share price has plummeted in value over the last year as oil prices fell by more than 40pc. It is undertaking a major cost-saving project that is expected to save $500m over three years after posting its first loss in 15 years in February. It was forced to scrap its 2014 dividend payment.
The company recently cut 46 people, or one third of its Irish workforce, at its Dublin office.
Mr Heavey added that he is concerned about the "medium to long-term price of oil", saying that despite current low prices a lack of exploration could lead to future price hikes.