Tullow Oil says cash flow could double if oil prices stay elevated

Tullow Oil PLC on Monday said it has received another chunk of cash under an agreement announced last year, and said if oil prices stay elevated, pre-financing cash flow guidance would ‘double’.

The London-based oil and gas company said it has received $36 million proceeds of the tranche B payment, under the terms of the sale and purchase agreement announced last July for the sale of its entire working interest in Kenya to Auron Energy E&P Ltd, an affiliate of Gulf Energy Ltd.

This is the second instalment of proceeds from the Kenya disposal and follows ratification by the Kenyan Parliament of the Field Development Plan for the South Lokichar oil project.

The final 10% of tranche B proceeds ($4 million) is pending completion of transition support services, which is expected before the end of March.

The final tranche of $40 million, payable over five years from the third quarter of 2028 onwards and no later than June 2033, is subject to the payment schedule as agreed under the terms of the SPA. In addition, Tullow retains a right to royalty payments and a no cost back-in right for a 30% participation in potential future development phases.

In addition, Tullow pointed out its 2026 pre-financing cash flow guidance of $150 to $180 million was issued at $65 per barrel.

Based on realised oil prices in January and February, and an average oil price of $100 per barrel for the remainder of 2026, pre-financing cash flow guidance would ‘double’.

Shares in Tullow Oil closed up 7.9% at 14.56 pence each in London on Monday, and have more than doubled year-to-date

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