Tullow has announced the disposal of its Kenyan assets for US$120m plus potential future royalties and retains a zero-cost back-in right for 30%. The disposal should cut leverage by around 10%, further improving the chances of completing a successful refinancing while removing the drain on management time and cost involved in endeavouring to achieve a commercial development. We were carrying a de-minimis US$9m risked NAV10 worth 1p per share in our valuation for Kenya so the disposal is at a large premium and takes our risked NAV10 to 61p/share (from 56p) which compares with the current share price of 14p.
