U.S. oil and gas company Kosmos Energy said on Thursday it was in early talks for an all-share acquisition of West Africa-focused Tullow Oil.
Earlier in the day, Tullow addressed recent media speculation by announcing that there is no certainty of any offers being made or of the terms of any potential offers.
Kosmos Energy has a deadline of 5 p.m. London time on Jan. 9, 2025, to decide whether to announce a firm intention to make an offer or to declare that it will not pursue the acquisition.
The Dallas, Texas-based company has a market cap of $1.75 billion, while Tullow Oil stood at 379.3 million pounds ($480.50 million).
Tullow's total production for the first half of 2024 was 63,700 barrels of oil equivalent per day (boepd).
Kosmos has production operations and exploration opportunities offshore Ghana, Equatorial Guinea and in the deepwater U.S. Gulf of Mexico and pumped 65,400 boepd in the third quarter.
"Kosmos Energy is in talks to acquire Tullow Oil in a potential all-share transaction. This will create a leading Atlantic Margin E&P with scale. We've already seen considerable consolidation take place onshore North America - could this mark the start of a similar trend across the rest of the world?" said Welligence Energy Analytics, a consultancy, on LinkedIn.
Tullow's shares closed 5.6% higher earlier in the day, while Kosmos' were down nearly 14.7% in afternoon trading.
($1 = 0.7894 pounds)
(Reuters - Reporting by Pushkala Aripaka and Seher Dareen in Bengaluru; Editing by Alan Barona and Mohammed Safi Shamsi)