- Tullow Cuts Gross Debt to US$1.60 Billion as Ghana Operations Drive Stronger Outlook
Tullow Oil has sharply upgraded its 2026 free cash flow guidance to between US$170 million and US$250 million, supported by stronger-than-expected production from its Ghana operations, higher realised oil prices and progress in recovering receivables owed by the Government of Ghana.
The London- and Ghana-listed producer said operational performance during the first half was driven by new wells exceeding expectations, production optimisation and uptime of more than 99.00% across the Jubilee and TEN floating production facilities.
The revised free cash flow guidance compares with a previous range of US$70 million to US$175 million, lifting the lower end by 142.86% and the upper end by 42.86%.
Chief Executive Ian Perks said the stronger performance had increased confidence in the company’s full-year outlook.
“We have delivered a strong operational performance in the first half of 2026, driven by our new wells performing ahead of expectations, production optimisation activities delivering tangible benefits and consistently high uptime across our assets,” he said.
“This momentum, together with stronger than expected oil price realisations underpins our upgraded full year free cash flow guidance of US$170-250 million at US$70-100/bbl.”
Ghana remains central to the company’s operating strategy.
Group production averaged approximately 43,700 barrels of oil equivalent per day during the first half, including roughly 7,500 barrels of oil equivalent per day of gas.
Gross Jubilee production averaged about 70,800 barrels per day, of which approximately 27,600 barrels per day were attributable to Tullow, while TEN produced about 14,800 barrels per day gross, equivalent to roughly 8,100 barrels per day net to the company. Both fields performed above expectations.
Performance from the latest Jubilee drilling campaign has also strengthened the production outlook.
The J76-P well came onstream in June with initial production rates described by Tullow as “significantly above expectations”. J77-P followed in July with initial rates in line with expectations, while J50-P began producing in early August and was also performing in line with forecasts.
Tullow attributed the stronger drilling results partly to insights generated from 4D seismic interpretation, which it said had improved reservoir understanding, target selection and production performance.
Operational reliability has been another important factor.
FPSO uptime at Jubilee and TEN averaged more than 99.00% during the first half, helping maximise production from installed capacity and reducing the risk of unplanned interruptions.
The stronger Ghana results contrasted with weaker performance from the non-operated Espoir field in Côte d’Ivoire, where production was affected by nearly two months of downtime between March and May.
Tullow’s working-interest production from Espoir averaged about 600 barrels of oil equivalent per day, below expectations. The company exited the licence on July 24, with operations transferred by operator CNR to Côte d’Ivoire’s national petroleum company PETROCI on behalf of the state.
Financially, Tullow generated first-half sales revenue of approximately US$496 million, including about US$47 million in hedge costs.
Average pre-hedge oil realisations across six cargoes were approximately US$95 per barrel, compared with about US$86 per barrel after hedging.
Capital expenditure totalled approximately US$131 million, while decommissioning expenditure amounted to around US$13 million.
The company also realised an additional US$9 million after terminating Kenyan royalty payments and a back-in right.
Pre-financing cash flow was approximately US$135 million, but free cash flow narrowed to just US$4 million during the first half after US$64 million in cash interest payments and US$68 million in one-off refinancing transaction costs.
The refinancing nevertheless helped reshape Tullow’s balance sheet.
Gross debt declined by about US$100 million to US$1.60 billion following a US$148 million repayment associated with the April refinancing transaction and a subsequent cash sweep payment. That was partly offset by approximately US$48 million in additional debt issued as part of the refinancing and capitalised interest.
At June 30, net debt stood at approximately US$1.40 billion, while liquidity headroom exceeded US$250 million.
For the full year, Tullow now expects working-interest production to finish at the high end of its 34,000–42,000 barrels of oil equivalent per day guidance range.
The final well in the current Jubilee campaign, water injector J73-WI, is expected to come onstream in September.
The company is already planning its next major Ghana drilling programme.
A rig contract is being progressed for up to 10 wells under the 2027/28 programme, expected to begin in the second half of 2027, with target selection supported by data from the 4D and Ocean Bottom Node seismic surveys.
Tullow is also progressing subsea pumps, further drilling targets, gas monetisation and intervention projects aimed at converting additional Jubilee and TEN resources into reserves.
Full-year capital expenditure guidance remains approximately US$200 million, with decommissioning expenditure forecast at around US$25 million.
The company now expects to lift 14 cargoes in 2026 11 from Jubilee and three from TEN two more Jubilee cargoes than initially projected in November 2025. Six cargoes were delivered during the first half, with another eight planned for the second half.
The latest Jubilee and TEN cargoes lifted in July realised an average price of approximately US$87 per barrel, while average oil price realisations from January through the end of July were approximately US$93 per barrel.
Tullow’s revised outlook therefore rests on a combination of higher Ghana production, stronger oil pricing and improved cash recovery rather than a single earnings driver.
The bigger question is whether that operational momentum can now translate into sustained debt reduction.
With Ghana accounting for Tullow’s core producing assets and a new 10-well campaign already being prepared, Jubilee and TEN remain central not only to the company’s 2026 cash generation but to its longer-term attempt to rebuild financial flexibility and create value from a more concentrated portfolio.
