Tullow Oil confirmed its 2025 production will reach the lower end of guidance targets while announcing a challenging outlook for 2026 as the company works to refinance its debt structure and counter natural field decline in Ghana.
The London-listed energy producer reported group production averaging approximately 40.7 thousand barrels of oil equivalent per day (kboepd) through October 2025, which includes 7.1 kboepd of gas. This figure reflects operations following the sale of Gabonese assets effective from the start of the year, according to a trading update released Thursday.
New Chief Executive Officer Ian Perks, who joined in September, acknowledged the company faces immediate financial pressures. The near term priority remains establishing long term sustainable financial footing through maximising operational efficiency in Ghana, cost optimisation, and refinancing the group’s capital structure, he stated.
Tullow successfully completed two major asset sales in recent months. The company sold its entire working interest in Kenya for at least 120 million dollars, with 40 million received in September and another 40 million expected upon Field Development Plan (FDP) ratification before year end. A third instalment of 40 million dollars becomes payable over five years beginning in the third quarter of 2028. The company also completed the sale of Tullow Oil Gabon SA in July for 307 million dollars net of tax and customary adjustments.
Production at the Jubilee field, where Tullow holds a 39 percent working interest, averaged approximately 61 thousand barrels of oil per day (kbopd) gross through October, translating to 23.9 kbopd net. The first of two planned 2025 production wells, designated J72-P, came onstream in July and has delivered good performance. Drilling recommenced at Jubilee in early November with the second production well, J73-P, scheduled to come onstream around year end.
The partnership has approved a five well 2026 drill programme, comprising four committed wells including three producers and one water injector, plus one option well currently being progressed. Interpretation of 4D seismic data acquired in the first quarter continues delivering informative reservoir visualisation insights and supports well design optimisation for the current campaign. The Ocean Bottom Node (OBN) seismic survey is underway and expected to complete around year end.
At the TEN fields, where Tullow holds 54.8 percent equity, oil production averaged approximately 16 kbopd gross or 8.9 kbopd net through October, exceeding expectations through continued strong performance at the Ntomme and Enyenra areas. Overall Floating Production Storage and Offloading (FPSO) uptime at Jubilee and TEN remained high at 97 percent through October.
Following the signing of a Memorandum of Understanding (MoU) with the Government of Ghana, good progress has been made to finalise agreements required to implement licence extensions for Jubilee and TEN through the end of 2040, together with 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 through the end of the licences.
In Côte d’Ivoire, Espoir production averaged approximately 1.2 kboepd net through October, slightly below expectations primarily due to gas export outages during the third quarter. Tullow continues working with the operator to optimise strategy going forward.
The company projects 2025 group production at the lower end of the 40 to 45 kboepd range previously guided. Capital expenditure and decommissioning expenditure guidance for 2025 remains approximately 185 million dollars and 20 million dollars, respectively. Free cash flow guidance for 2025 remains approximately 300 million dollars at 65 dollars per barrel, with realised oil price after hedging through October averaging approximately 68 dollars per barrel.
This free cash flow figure includes recovery of outstanding gas receivables due from the Government of Ghana of approximately 100 million dollars which are yet to be received. Total receivables due from the Government of Ghana, including TEN development debt and overdue cash calls, stood at over 200 million dollars net to Tullow as at the end of October. The company is working closely with the government and its various agencies to resolve this situation.
Year end 2025 net debt guidance is approximately 1.2 billion dollars. Production in 2026 will depend on multiple factors, including production from new wells helping to offset natural decline from existing well stock.
For 2026, Tullow projects group production of 34 to 42 kboepd based on an oil price assumption of 65 dollars per barrel. Capital expenditure is expected to reach approximately 200 million dollars, with decommissioning costs of approximately 25 million dollars. Pre-financing cash flow is projected at approximately 70 to 100 million dollars.
Cost base optimisation savings of approximately 10 million dollars are well progressed, aimed at reducing 2025 annual net general and administrative (G&A) costs to approximately 40 million dollars, with targeted savings of approximately 50 million dollars over the next three years compared to 2024.
Tullow is engaging with bondholders, commodity traders and other private sources of funding regarding refinancing of its capital structure. However, given the risks associated with business performance, wider market conditions and the upcoming May 2026 bond maturity, Tullow is progressing alternative options with certain of its creditors, including an amend and extend exercise and other forms of liability management transactions.
Perks noted that the company faces challenges related to natural decline in existing well stock and is focused on exploring all options to help mitigate this. Looking ahead into 2026, the company will look to optimise production through management of the decline and additional production from new wells, he added.
Tullow Oil is an independent energy company focused on responsible oil and gas development in Africa. The company’s operations are centred on its core producing assets in Ghana. Tullow is quoted on the London and Ghanaian stock exchanges under the symbol TLW.
Source: newsghana.com.gh
