Tullow Oil says revenue to halve, pushes maturing debt back two years
Tullow Oil PLC on Friday said it expects revenue to halve year-on-year when it reports its full-year 2025 results.
It also reported it struck a deal with two-thirds of senior secured bondholders to push repayments for about $1.29 billion due in May to November 2028, and that an additional $400 million facility provided by Glencore PLC will be swapped for junior notes maturing in 2030.
The London-based oil and gas company said falling commodity prices towards the end of 2025 and delays in payments from the governments of Ghana and Kenya for a combined $180 million, in addition to other rising receivables, had a negative impact despite 2025 being ‘a year of disciplined execution across the business’.
Tullow Oil said it expects revenue of about $847 million when it announces its results for 2025, with $322 million of free cash.
Despite the savings, it said pre-tax receivables from Ghana reached $225million for cash calls, development debt, and gas payments. It is also awaiting the ratification of Kenya’s field development plan to collect $40 million for the second instalment of the country’s disposal.
The expected fall in revenue, coupled with a $1.29 billion in debt maturing in about two months, forced the company’s hand to refinance its debt. The 10.25% senior secure notes will be released and swapped to new extended notes maturing in late 2028 alongside a $100 million paydown, while Glencore’s secured notes facility will be replaced by junior notes maturing in May 2030.
Glencore also provided Tullow Oil with a $100 million cargo prepayment facility.
At the same time, Tullow said it signed a purchase agreement for the production facility for offshore Ghana oil and gas fields for $205 million, to be paid in early 2027, using proceeds from the fields themselves, while extending supply agreements with the country until 2040.
Tullow’s Chief Executive Officer Ian Perks said: ‘2025...includes strong operational momentum which continues with excellent results from the latest Jubilee well and a further five wells due onstream this year to support our production targets. We have achieved significant cost reductions and completed the sale of non-core assets in our ongoing efforts to streamline our portfolio and strengthen our financial position. However our 2025 full year free cashflow was negatively impacted by the commodity price environment...and delays in receipts.’
‘The refinancing transaction we have announced today enables us to focus on delivering our near-term priorities, which include driving further cost efficiencies, improving cashflow management and optimising our production,’ he added.
Tullow Oil shares were down 2.3% to 10.26 pence each in London on Friday afternoon.
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