Tullow Oil to quit Irish stock market as it prepares for merger

Tullow Oil has decided to quit the Dublin stock market after 33 years, as the Irish-founded group seeks to cut regulatory red tape and costs ahead of its planned £1.4 billion (€1.62 billion) merger with Capricorn Energy.

The Africa-focused company’s shares will continue to be traded on the London Stock Exchange, where it listed in 1994 and moved its primary quotation in 2000, as well as the stock exchange of Ghana, home of its flagship offshore Jubilee and TEN oilfields.

The move follows “careful review” by the board and is expected to “simplify compliance and regulatory obligations of Tullow and is in line with an overall objective to reduce central costs and its purpose,” the company said in a statement on Monday.

A spokesman highlighted that trading in Tullow Oil shares Dublin had been “minuscule” for some time compared with activity in London. The company was founded by Aidan Heavey in 1985 in Tullow, Co Carlow.

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“Any delisting of Tullow’s ordinary shares from the Irish market is subject to the approval of Euronext Dublin,” the company said, referring to the operator of the Irish market. “It is anticipated that the delisting will take effect on or around 10 October, 2022.”

The move comes 2½ years after the company decided to close its Dublin office, which had 55 staff mostly working as geologists, as part of a round of corporate restructuring. It had moved its domicile to the UK two decades ago.

Tullow announced in June that it planned to merge with cash-rich, Edinburgh-based Capricorn Energy in a deal that would see Tullow shareholders take 53 per cent of the larger entity. The tie-up would combine Capricorn’s $700 million-plus net cash position with Tullow’s $2.1 billion net debt, speeding up a decline in the latter’s borrowings, which stood at more than $3 billion in the middle of 2020.

Still, Tullow, led by chief executive Rahul Dhir, is set to be the main driver of oil production, earnings and organic free cash flow for the foreseeable future, according to the analysts. This is mainly down to the Jubilee and TEN fields.

Documentation on the planned merger is expected to be posted to shareholders in both companies in the coming months.

Meanwhile, Tullow last month said it would abandon its drilling operations at an exploration well in offshore Guyana after results showed it bore water, marking another disappointment for companies drilling offshore the Caribbean nation.