Korea National Oil Company is to pay £220 million for Tullow Oil’s share of the M’Boundi field in Congo (Brazzaville).

Korea National Oil Company is to pay £220 million for Tullow Oil’s share of the M’Boundi field in Congo (Brazzaville).

This sum will buy fully listed Tullow’s 11 per cent interest in M’Boundi, which is one of Africa’s largest onshore oil fields. ENI, the Italian group that operates the field, expects to increase production from the present 37,000 barrels a day during the year.

Selling M’Boundi will provide more funds for Tullow to develop its prospects in Uganda and Ghana and elsewhere in Africa and Asia. The company, whose overall attributable production rose 13 per cent to an average 73,100 barrels a day last year, said it expected to record a £15 million charge owing to a downgrade of recoverable reserves from the Chinguetti field off the coast of Mauretania.

First recommended by M&A’s sister site Growth Company Investor at 72p five years ago, Tullow shares hit 682.5p last month, after we suggested partial profit taking at 593.5p. Now 607p, up 10p this morning, they value the company at £4.37 billion and should fare better than some sector peers, though they are unlikely to repeat earlier dazzling growth.