Tullow Oil sticks to Capricorn merger plans, $200m cash flow forecast


Workers walk past storage tanks at Tullow Oil’s Ngamia 8 well site in Lokichar, Turkana County, Kenya, February 8, 2018. REUTERS/Baz Ratner/File Photo

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LONDON, Sept 14 (Reuters) – Africa-focused Tullow Oil (TLW.L) said on Wednesday it would stick to the current form of its all-share merger plan with Capricorn Energy (CNE.L), shaking off criticism some ex-Capricorn investors who say the deal undervalues ​​the company.

Capricorn’s board supports the merger, but the group also said last week it was exploring alternative deals after unnamed parties expressed interest.

Capricorn shareholders Madison Avenue, Legal & General IM and Schroders, as well as several other investors, have opposed the merger plan. Continue reading

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The deal requires approval from at least 75% of Capricorn shareholders, a threshold that could be at risk if hedge fund investors who have criticized the deal convert their derivative investments into direct holdings.

Tullow on Wednesday reiterated its full-year free cash flow guidance of $200 million with oil at $95 a barrel, after reporting negative cash flow of $205 million in the first half following an acquisition and arbitration payment had recorded.

Tullow, which had a market cap of about $835 million as of Tuesday, had net debt of about $2.3 billion at the end of the first half. It forecasts the ratio of net debt to core earnings, or gearing, to fall to 1.5 times by the end of the year.

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Reporting by Shadia Nasralla; Editing by Jason Neely

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