Kosmos Energy has confirmed that it is in “preliminary discussion” with Tullow Oil, an independent oil and gas exploration company, regarding a potential all-share takeover offer. The announcement follows recent media reports speculating about the deal.

Tullow Oil is in talks to be taken over by Dallas-based Kosmos Energy, in a potential deal that would end the Irish founded explorer’s 40 year history as an independent company.

West Africa-focused Tullow Oil said on Thursday it was in preliminary talks with U.S.-listed Kosmos Energy over a possible all-share offer. Tullow said the announcement is being made in response to recent media speculation,

Kosmos Energy (NYSE:KOS) confirmed that it's in "very preliminary" talks with Tulllow Oil (OTCPK:TUWLF) about a potential purchase of Tullow. Tullow ADRs jumped 23%, while Kosmos fell 12%. There's no certainty that any offer will be made,

The potential takeover by Kosmos Energy Ltd of Tullow Oil, the Irish-founded oil explorer, could resolve its balance sheet issues, but debt refinancing would be a challenge, according to analysts.

A potential takeover by Kosmos Energy Ltd. could resolve Tullow Oil Plc’s balance sheet issues, but debt refinancing would be a challenge, according to analysts.

U.S. oil and gas company Kosmos Energy is in early talks for an all-share acquisition of Tullow Oil that would create a West Africa-focused producer. The merger of the two heavily indebted firms would be the latest in a recent wave of energy industry consolidation as company boards look to boost performance by increasing scale and cutting costs.

London's Tullow Oil could be acquired by larger US rival Kosmos Energy after the pair revealed preliminary discussions.