Tullow Oil Updates on Ghana Operations and Refinancing Strategy

Tullow Oil trading update: Ghana delivery, asset sales and a looming refinance

Tullow Oil’s November trading update is a blend of operational progress in Ghana, tidy portfolio pruning, and a clear signal that refinancing the balance sheet is front and centre. Below I break down the key numbers, what they mean, and why they matter for investors.

Headline numbers at a glance

Metric	Figure
2025 Group production to end-Oct	c.40.7 kboepd (incl. 7.1 kboepd of gas)
Jubilee oil production 2025 avg	c.61 kbopd (c.23.9 kbopd net)
TEN oil production 2025 avg	c.16 kbopd (c.8.9 kbopd net)
FPSO uptime (Jubilee + TEN)	97% to end-Oct
2025 production guidance	Lower end of 40-45 kboepd
2025 capex / decom	c.$185 million / c.$20 million
2025 free cash flow at $65/bbl	c.$300 million
Year-end 2025 net debt	c.$1.2 billion
Receivables due from Government of Ghana	Over $200 million (incl. c.$100 million gas receivables within 2025 FCF)
Kenya sale proceeds	$40m received, $40m expected on FDP ratification before year-end, $40m from Q3 2028 over five years
Gabon sale proceeds	$307 million (net of tax and adjustments)
2026 production guidance	34-42 kboepd
2026 pre-financing cash flow	c.$70-100 million

Ghana operations: drilling restarts and licence extensions to 2040

Ghana remains the engine. Jubilee averaged c.61 kbopd in 2025 to end-October, net c.23.9 kbopd to Tullow. Performance reflects earlier issues, but the J72-P well came onstream in July and is doing the heavy lifting. Drilling restarted in November, with the next producer, J73-P, due around year-end. That should help stabilise volumes into 2026.

TEN delivered c.16 kbopd in 2025 to end-October, net c.8.9 kbopd, which is above expectations thanks to continued strong Ntomme and Enyenra performance. Uptime across the Jubilee and TEN FPSOs (floating production, storage and offloading vessels) was a healthy 97%, which underpins cash generation.

Seismic and subsurface work: setting up the 2026 campaign

Tullow has been busy on the subsurface. New 4D seismic data acquired earlier this year is improving reservoir visualisation and well design. 4D seismic is essentially time-lapse 3D, used to track how fluids move in the reservoir. An Ocean Bottom Node (OBN) survey is underway and due to complete around year-end. Integrating OBN with the towed streamer 4D data should deliver a better velocity model in 2026, aiding imaging and fluid predictions. In plain English: better targeting for wells.

The partnership has approved a five-well 2026 programme: three producers, one water injector, plus an optional producer that is being progressed. The focus is on mitigating natural decline from the existing well stock.

Licence extensions and gas sales security

A Memorandum of Understanding with Ghana has paved the way to extend the Jubilee and TEN production licences to the end of 2040. The parties are finalising the agreements, including payment security for gas and an updated Plan of Development for Jubilee. A new Jubilee Gas Sales Agreement is now in place, confirming the current gas price to the end of the licences. For investors, that combination of tenure and pricing clarity reduces risk on long-dated cash flows.

Côte d’Ivoire: Espoir slightly soft

Espoir averaged c.1.2 kboepd net to end-October, slightly below expectations due to gas export outages in Q3. Tullow is working with the operator to optimise the strategy. Small in the group context, but still worth watching for cash contribution discipline.

Portfolio moves: exits in Kenya and Gabon simplify the story

Tullow has delivered on two significant disposals. The sale of its entire working interest in Kenya completed on 25 September with $40 million cash received, another $40 million expected on Field Development Plan ratification before year-end, and a final $40 million payable over five years from Q3 2028 onwards. The Gabon exit completed on 29 July for $307 million, net of tax and adjustments.

The disposals streamline the business around Ghana and bring in cash. Note that 2025 group production numbers already reflect the Gabon sale effective from the start of the year.

Costs, cash and the refinancing to-do list

On costs, Tullow has c.$10 million of savings well progressed, aiming to reduce 2025 annual net G&A to c.$40 million, with a target of c.$50 million cumulative savings over the next three years compared to 2024. Sensible housekeeping that supports margins.

Free cash flow for 2025 is guided at c.$300 million at $65/bbl. Tullow’s realised oil price after hedging to end-October was c.$68/bbl. One important caveat: that FCF includes c.$100 million recovery of outstanding gas receivables due from the Government of Ghana that have not yet been received. In total, receivables due from the Government of Ghana stood at over $200 million (net to Tullow) at the end of October, including TEN development debt and overdue cash calls. The company is working closely with the government and agencies to resolve this.

Year-end 2025 net debt is guided at c.$1.2 billion. With a May 2026 bond maturity approaching, Tullow is engaging with bondholders, commodity traders and other private funding sources. Given business risks and market conditions, it is also progressing alternative options with certain creditors, including an amend and extend exercise and other liability management transactions. In plain terms, the company is preparing multiple paths to push out maturities and manage the capital structure.

Guidance for 2025 and 2026: production at the low end, cash tighter in 2026

Group production for 2025 is expected at the lower end of 40-45 kboepd. Capital expenditure and decommissioning remain at c.$185 million and c.$20 million, respectively. The natural decline in the existing well stock is still a headwind, though new wells should help offset it into 2026.

For 2026, Tullow guides 34-42 kboepd at a $65/bbl oil price assumption, with capex of c.$200 million, decommissioning c.$25 million, and pre-financing cash flow of c.$70-100 million. Pre-financing cash flow is the cash generated before financing flows, such as debt service. The step down versus 2025 highlights why the refinance matters and why the 2026 drilling programme needs to land well.

My take: positives, pressure points and what to watch

• Positives: High FPSO uptime at 97%, TEN outperforming, Jubilee drilling back online with J73-P due around year-end, and material licence-life clarity to 2040 with gas price confirmed. Portfolio simplification with Kenya and Gabon sales brings focus and cash.
• Pressure points: 2025 production at the low end and 2026 guidance implies potential decline if new wells slip. Free cash flow for 2025 assumes c.$100 million of Ghana gas receivables are recovered, and total receivables exceed $200 million. Net debt at c.$1.2 billion into a May 2026 maturity means refinancing is the key catalyst and risk.
• What to watch next: Finalisation of the Ghana licence extensions and payment security for gas, delivery of J73-P and the 2026 drilling schedule, actual cash receipts of Ghana receivables, and concrete outcomes from amend and extend or other liability management talks.

Jargon buster

• kboepd/kbopd: Thousand barrels of oil equivalent per day/thousand barrels of oil per day.
• 4D seismic: Time-lapse 3D seismic used to track fluid movement and optimise well placement.
• OBN: Ocean Bottom Node seismic sensors placed on the seabed for higher quality imaging.
• FPSO: Floating production, storage and offloading vessel.
• MoU: Memorandum of Understanding, a non-binding agreement outlining key terms ahead of final contracts.
• Pre-financing cash flow: Cash generated before financing activities, as defined by Tullow.
• Amend and extend: Negotiating with creditors to change terms and push out debt maturities.

Bottom line: operationally, Ghana is moving the right way and the subsurface work sets up 2026. Financially, asset sales and cost cuts help, but receivables timing and the May 2026 bond loom large. This is a classic execution story – deliver the wells, secure the licence and gas payment framework, collect the cash, and land the refinance.