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Tullow plans £1bn share sale to fund growth

UK explorer Tullow Oil plans to sell up to 80.4 million new shares through an equity placing, representing about 10pc of its existing ordinary share capital.

The funds will finance further exploration and advance development in Uganda and Ghana, Tullow said in a statement distributed on the Regulatory News Service today.

At yesterday’s closing price of 1,216 pence a share, the placing would raise about £978m (€1.1bn).

Tullow wants to ensure sufficient capital to maintain a $500m a year exploration program as well as developing its African assets, it said.

It plans to use some of the capital to conduct additional appraisal and development of Tweneboa and subsequent phases of the Jubilee field in Ghana.

Tullow plans an accelerated book-building process being carried out by Merrill Lynch International and RBS Hoare Govett Ltd. acting as joint global coordinators and book-runners.

Tullow said in a separate trading statement that it has “never been in a better position to deliver growth.” It is forecasting £990m of expenditure this year, up from £690m in 2009, and had net debt at the end of December of £720m.