Tullow offloads Bangladesh gas operation for $42m
TULLOW Oil has sold its Bangladesh gas production to Asian mining company KrisEnergy for $42.35m, a lower price than analysts expected.
This is the first in a series of planned sales for the Irish-owned mining giant which is trying to focus on oil production and move away from non-core gas assets. The company has previously said that these assets have served it well but no longer fit with its strategy of pursuing big oil exploration opportunities in Africa and the Atlantic.
Dublin stockbrokers Davy said it had valued Tullow’s Pakistan and Bangladesh assets at $100m, but that the €45m Bangladesh sale price makes that combined valuation less realistic. It says the price reflects relatively low gas price in Bangladesh.
Tullow chief exec Aidan Heavey said “This sale is part of a process of portfolio management and asset monetisation which forms a key part of our exploration-led strategy. This process continues with the proposed sale of gas assets in Pakistan and the UK and Dutch North Sea."
Goodbody Stockbrokers says another newly discovered gas field in Bangladesh is also thought to have lowered the sale value by introducing a degree of uncertainty over production volumes.
The Irish broker says Tullow’s planned North Sea sale will be more significant and should take place in the second half of the year.
Tullow made €666m in 2012, down 3pc on the previous year.