Tullow’s 2025 trading update: steady operations, tighter costs, slower cash
Tullow Oil has posted a mixed 2025 trading statement. Operationally, Jubilee and TEN kept momentum, costs came down, and portfolio simplification continued. Financially, free cash flow landed below prior hopes, mainly due to delayed receivables in Ghana, a Kenya disposal instalment slipping, and weaker late-year prices.
Two strategic moves standout for 2026 and beyond: a refinancing that extends key debt maturities and adds liquidity, and Ghanaian Petroleum Agreement extensions to 2040 with a new gas price framework. Both matter for stability and long-term value.
Production and revenue: Jubilee steady, TEN resilient, 97% uptime
Group working interest production averaged around 40.4 kboepd in 2025, including roughly 7.1 kboepd of gas, reflecting the sale of Gabon at the start of the year. Jubilee gross output averaged about 60.9 kbopd (23.7 kbopd net to Tullow) despite a planned 15-day shutdown. TEN delivered around 16.0 kbopd gross (8.8 kbopd net), supported by Ntomme and Enyenra performance. Exit rates were circa 57 kbopd for Jubilee and 15 kbopd for TEN.
Uptime averaged 97% across the FPSOs, aided by completed 4D seismic and Ocean Bottom Node surveys that are informing well placement. Non-operated Espoir contributed around 1.2 kboepd.
Revenue was approximately $847 million, including $19 million of hedge costs, at an average realised oil price before hedging of $67.8/bbl.
Cash flow squeeze: Ghana receivables and Kenya timing
Free cash flow for 2025 came in around $100 million. The shortfall versus earlier expectations was driven by three things:
- Kenya disposal Tranche B of $40 million slipping to ratification of the approved Field Development Plan, expected in Q1 2026 with a 30 June 2026 back-stop.
- Delays in Government of Ghana receivables – around $40 million of cash calls and about $100 million of gas payments.
- Lower revenue in November and December, around $20 million.
As of 31 December 2025, Government of Ghana receivables totalled roughly $225 million net to Tullow (pre-tax): $65 million cash calls, $110 million gas payments, and $50 million related to TEN development debt. Tullow is engaging with the Government and its agencies to resolve outstanding balances.
Refinancing extends runway and adds liquidity
Tullow has extended its Senior Secured Notes to November 2028 and the Glencore facility to May 2030. It has also agreed a new $100 million cargo pre-payment with Glencore, bolstering liquidity. Post-transaction, Tullow expects liquidity headroom – free cash plus undrawn facilities – in excess of $200 million, with capacity to absorb about $100 million working capital swings during 2026.
Free cash at year-end was $322 million, with net debt reduced to around $1.35 billion and liquidity headroom of over $300 million at year-end.
Ghana deal extended to 2040 with new gas price and GNPC step-up
Ghana’s Parliament has ratified extensions of the West Cape Three Points and Deep Water Tano Petroleum Agreements to 31 December 2040. From 20 July 2036, GNPC’s share increases by a further 10%, diluting partners pro rata. Tullow has secured revised terms for Jubilee gas supply at an escalating price of $2.50/mmbtu to the end of the extension and agreed a gas payment security mechanism. Heads of terms are also in place for potential gas offtake from TEN.
Why it matters: longer licence life supports more wells, incremental recovery and infrastructure-led efficiencies. The future GNPC step-up trims the 2036+ equity share, but today’s certainty on term and gas offtake helps planning and bankability.
Reserves and resources: down after disposals and revisions
Independently audited 2P reserves at year-end 2025 were 100.4 mmboe (2024: 164.5 mmboe), valued at about $1.3 billion on an NPV10 at strip price basis. Movements reflect 2025 production of 14.7 mmboe, the Gabon disposal of 36.0 mmboe, a 11.8 mmboe downward revision at Jubilee, and a 1.6 mmboe reduction at TEN due to project rephasing and a lower evaluation oil price assumption affecting cessation timing.
2C resources sit around 200 mmboe (2024: circa 700 mmboe), following the sale of Kenyan resources, about 460 mmboe, and Gabon, around 30 mmboe. The company highlights tangible opportunities in Ghana to mature resources into reserves in 2026, including subsea pumps, further infill drilling on Jubilee and TEN, and potential monetisation of TEN non-associated gas. See the TRACS Independent Audit of Tullow Petroleum Assets 2025 here.
TEN FPSO acquisition aims to drive cost efficiencies
On 19 February 2026, Tullow signed an SPA to acquire the TEN FPSO on behalf of the joint venture for a gross $205 million ($125.6 million net to Tullow), payable on completion at the end of Q1 2027. The plan is to maximise operational synergies with Jubilee and drive further cost efficiencies underpinning the longer-term development of both fields.
2026 outlook: wells, capex and cash generation
Group working interest production is guided at 34-42 kboepd in 2026, including about 6 kboepd of gas. The midpoint assumptions are roughly 60 kbopd gross at Jubilee and 12 kbopd at TEN, with FPSO uptime of 94-98% across the range.
Wells are the swing factor. Five new Jubilee wells (four producers and one water injector) are planned to join the recently completed J74-P. J74-P came onstream 6 January 2026 with about 50 metres of net pay and initial gross output around 13 kbopd, with back-out effects being optimised. J75-P has encountered three good reservoir intervals and is expected onstream around the end of Q1 2026.
Capex is forecast around $200 million, with decommissioning about $25 million. Pre-financing cash flow – which Tullow defines as underlying operating cash flow plus net investing cash flow and decommissioning – is guided at roughly $150-180 million at $65/bbl. This now includes the delayed $40 million Kenya payment and around $40 million of delayed Ghana cash call receivables. Guidance includes around $40 million of 2026 pre-tax gas revenues but excludes $110 million of historical gas receivables and the $50 million TEN development debt receivable.
Sensitivity is meaningful: cash flow would reduce by about $40 million at $60/bbl and a further $20 million at $55/bbl.
Costs and disputes: leaner G&A, Kenya tax assessment, Ghana arbitrations
Cost base optimisation delivered about $10 million of savings in 2025, reducing net G&A to around $43 million. Tullow is targeting approximately $50 million of savings over the next three years versus 2024.
On Kenya, the company received a tax assessment of roughly $170 million relating to alleged underpaid VAT and Capital Gains Tax on the 2025 disposal. Tullow’s position is that the assessment is wholly without merit, and it intends to contest with Gulf Energy. No cash outflow is expected for lodging objections or at completion of the appeal process.
In Ghana, the Business Interruption Insurance arbitration hearing concluded in November 2025 with a result not expected until H2 2026. A loan interest arbitration hearing is scheduled for September 2026. Tullow has advanced discussions with the Government of Ghana to resolve assessments on a mutually acceptable basis.
What it means for investors: stability up, execution still key
- Positive – Extended debt maturities to 2028 and 2030 and a new $100 million prepay improve resilience and liquidity.
- Positive – Ghana licence extensions to 2040 and a defined gas price of $2.50/mmbtu support long-term planning, even with GNPC’s 10% step-up from 2036.
- Mixed – Operational delivery is solid, but 2025 cash conversion was hampered by receivable delays and prices. The focus now is cash discipline and collections.
- Watchouts – Material Ghana receivables of about $225 million at year-end, reserve downgrades at Jubilee, and the Kenya tax assessment dispute.
- Optionality – TEN FPSO ownership from 2027 and ongoing infill programmes could unlock cost and recovery gains if executed well.
Key numbers at a glance
| 2025 WI production | c.40.4 kboepd (incl. c.7.1 kboepd gas) |
| Jubilee production (gross/net) | c.60.9 kbopd / c.23.7 kbopd |
| TEN production (gross/net) | c.16.0 kbopd / c.8.8 kbopd |
| FPSO uptime | 97% |
| Revenue | c.$847 million (incl. c.$19 million hedge costs) |
| Average realised oil price (pre-hedge) | $67.8/bbl |
| Free cash flow | c.$100 million |
| Capex / Decommissioning (2025) | c.$166 million / c.$17 million |
| Cash (31 Dec 2025) | $322 million |
| Net debt (31 Dec 2025) | c.$1.35 billion |
| Ghana receivables (31 Dec 2025) | c.$225 million (pre-tax) |
| 2P reserves (YE25) | 100.4 mmboe |
| 2026 production guidance | 34-42 kboepd (incl. c.6 kboepd gas) |
