Tullow Oil has issued the following statement in advance of the Group’s Annual General Meeting (AGM), which is being held today.
The information contained herein has not been audited and may be subject to further review and amendment.
Richard Miller, Chief Financial Officer and Interim Chief Executive Officer of Tullow, commented:
'The strengthening of our balance sheet continues to be the key priority for the team and there is renewed energy within the business following a number of recent key milestones achieved, despite the challenging oil price environment. Our strategy to divest certain non-core assets to accelerate our deleveraging trajectory is progressing well, with the sale of Gabon and Kenya expected to provide near term cash proceeds of $380 million.
'We continue to advance our plans to refinance our capital structure during 2025 which, coupled with our cost optimisation programme to realise c.$10 million annual cash net G&A savings and a continued disciplined approach to capital allocation, will lay a solid foundation for future value creation.'
Operational update
- Group working interest production in the first quarter of 2025 was 52.9 kboepd, including 7.1 kboepd of gas production, within the expected range for the period and affected by a two-week planned maintenance shutdown conducted safely and on budget on the Jubilee field.
- 2025 Group working interest production guidance, prior to Gabon transaction completion, remains 50 to 55 kboepd, including c.6 kboepd of gas.
- Next Ghana drilling campaign has commenced with the first well, a Jubilee producer, expected onstream in the third quarter of 2025.
- Analysis of the 4D seismic survey, which was completed in first quarter of 2025, is underway and will support future well locations to drive reserves growth.
Financial update
- Strong progress made on accelerating our deleveraging process through non-core asset disposals:
- Sale and purchase agreement (SPA) signed for the sale of Tullow's entire Gabonese portfolio of assets for a total cash consideration of $300 million net of tax. Approval by the Gabonese Ministry of Hydrocarbons has already been received and subject to the remaining conditions precedent, completion of the transaction and receipt of funds is expected around the middle of the year.
- Heads of terms signed for the sale of Tullow's entire working interests in Kenya, for a minimum cash consideration of $120 million, with additional royalty payments subject to certain conditions and an option to back-in for 30% of potential future development phases at no cost; on track to sign SPA in the near-term. Completion and receipt of first two payments totalling $80 million are expected during 2025.
- Net debt at 31 March was $1.6 billion, an increase from year end due to the timing of liftings.
- Hedge portfolio protects c.60% of forecast 2025 sales volumes at weighted average price of $59/bbl, increasing to c.70% on completion of Gabon portfolio sale.
- Optimisation of cost base continues, with expected c.$10 million savings identified, reducing annual cash net G&A to c.$40 million, before additional material savings expected as a result of Gabon and Kenya transactions.
- Full year free cash flow guidance is now $400 million at $65/bbl, inclusive of both $380 million of disposal proceeds and c.$50 million of overdue gas payments in Ghana from 2024, resulting in expected year-end net debt of c.$1.1 billion.
- Tullow has extended its Revolving Credit Facility (RCF) to the end of October 2025, with all lenders participating in the extension, demonstrating their ongoing support. The RCF, which is currently drawn to manage near-term working capital, has been reduced to $150 million, in line with working capital requirements in a low oil price environment. The facility will be repaid and cancelled in full on completion of the Gabon disposal when it will no longer be required for liquidity management.
Governance update
- The process to find a new CEO is progressing and an update will be provided in due course.
Source: Tullow Oil
