Tullow Oil surges as Uganda govt approves $575m asset sale to Total

Tullow Oil shares surged on Wednesday after the government of Uganda and the country's revenue authority approved the $575m sale of its assets there to Total.

Tullow said that with all the government-related conditions to closing having been satisfied, it expects the deal to close "in the coming days" after completing certain customary pre-closing steps with Total.

The oil and gas exploration company said it will provide a further update once the transaction has closed and funds have been received.

On closing, Tullow will receive $500m, with a further $75m due when a final investment decision is taken on the development project. In addition, Tullow is entitled to receive contingent payments linked to the oil price payable after production commences.

Tullow said in April that it had agreed to sell its Ugandan assets to Total and that the proceeds would be used to reduce net debt, strengthen the balance sheet and move the company towards "a more conservative capital structure".

It said at the time that completion was expected in the second half of this year.

At 1210 BST, the shares were up 27% at 20.92p.