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Tullow agrees to sell stake in Ugandan oil development for $900m


Traders work on the floor of the New York Stock Exchange (NYSE)

Traders work on the floor of the New York Stock Exchange (NYSE)


Traders work on the floor of the New York Stock Exchange (NYSE)

Tullow Oil has agreed to sell a stake in an oil development in Uganda for $900m, driving its shares higher.

French explorer Total will acquire a 22pc stake in the Lake Albert development, leaving Tullow with 11.76pc, the company said on Monday. The deal means the capital needed to exploit the prospect will be funded by Total. Tullow will be paid $200m in cash, with the remaining $700m a "deferred consideration" used to cover costs.

Landlocked Uganda has an estimated 1.7 billion barrels of recoverable oil at fields in the Lake Albert basin that its government expects Tullow, Total and China's Cnooc Ltd to start pumping by 2021. The government has estimated it will receive $43bn of revenue from the resource over 25 years.

Shares in London- and Dublin-listed Tullow shares rose as much as 8.4pc.

The Iseq index closed down a third of one percent at 6571.76. With sterling weaker the FTSE index in London climbed to a record high, however.

Elsewhere, European shares edged lower on Monday in early deals, though a rise among basic resources stocks helped Britain's FTSE 100 index hit a fresh record high.

The pan-European STOXX 600 index was down 0.1pc. The FTSE 100 outperformed its continental peers, gaining 0.3pc to hit a fresh all-time high of 7,239.26 points. The British blue chip index was on track to mark its tenth session of straight gains, having closed at a record level last Friday.

Germany's Fresenius Medical was another big faller, down 3.4pc after it received subpoenas from prosecutors investigating ties to a charity that helps patients pay for kidney dialysis.

Irish Independent