The advantages of the merger between Tullow Oil and Capricorn are substantial for the two firms: $1.8 billion of combined liquidity and $50 million per annum in pre-tax net cash cost savings seeing free cash flows of $2.4 billion estimated over the coming three years.

Early indications show the combined group’s post-merger moves most likely to lie across Tullow Oil’s extant African reserves as well as Capricorn’s emergent presence on the continent in Egypt with infill drilling and low-cost exploration, alongside Kenya, Guyana and Mauritania – all countries with high prospective resource bases accessible with limited capital exposure.

The hybrid company will be London-listed owing to both firms’ UK bases, Capricorn shareholders holding 47% and Tullow Oil shareholders 53% following the combination of equals.

The post-merger company board will also be shared, notably, Tullow Oil’s current Chair, Phuthuma Nhleko taking over chairmanship over the combined board, whilst Capricorn’s Chair, Nicoletta Giadrossi assumes the role of Senior Independent Director. Rahul Dhir, current CEO of Tullow will hold the CEO post following the merger, Capricorn’s CFO, James Smith, doing likewise.