Tullow Oil Plc (TLW) delayed the sale of its U.K. and Dutch assets in the North Sea to 2015 because the package was too big to attract the right offer.
The U.K. driller focused on Africa and Latin America planned to sell the southern North Sea gas fields this year. It now expects to dispose of the interests in a year to 18 months, said Chief Operating Officer Paul McDade. The fields produced about 18,000 barrels of oil equivalent a day last year.
“The package structure was probably a little bit too big,” McDade said in a phone interview. “People saw the value, but probably struggled to put together the financing.” The assets have to be restructured “into smaller components.”
Tullow has been selling fields in Bangladesh and Pakistan to exit Asia and is seeking to reduce its stake in the Tweneboa, Enyenra and Ntomme deposits, collectively known as TEN, off Ghana to streamline its asset portfolio and reduce costs. The London-based company has more than $2 billion available in cash to fund its projects.
“The driver for this is not timing, the driver is value,” McDade said. “It would be nice to tidy up the portfolio.”
He declined to comment on the North Sea assets’ value, estimating that they generate about 15 percent of the company’s $1 billion annual cash flow.
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