Update: Tullow to buy Heritage's Uganda assets

26th Jan 2010 16:32

Tullow Oil said it has agreed to buy Heritage Oil's assets in Uganda for up to $1.5bn, gatecrashing Heritage's previous deal with Italy's Eni.The terms of the deal include a consideration of $1.35bn cash and a further contingent, deferred consideration of up to $150m cash or an interest in a mutually agreed producing oil field independently valued at a similar amount.The group said it expects the approval process to be completed in the first quarter of 2010.The announcement came after Heritage Oil shareholders approved the sale of the company's 50% stake in Blocks 1 and 3A in Uganda to either Tullow or Eni.Eni agreed in November to buy Heritage's Ugandan interests for $1.35bn in cash and a deferred consideration of $150m.But Tullow Oil started gatecrashing the deal last week, exercising a pre-emption right to snap up the holding for the same price.'The principal outstanding condition to the sale of the disposed assets is the formal approval by the Ugandan government who will decide, in their role as final arbiter, which of the proposed purchasers to accept,' read a statement from Heritage.The company said it will apply for formal approval as soon as possible, though ratification of the deal may not be clear cut as there have been reports of concerns that Tullow is controlling too much of the country's oil reserves.