Tullow Oil Targets $500m Debt Reduction with Key Asset Sales in Gabon and Kenya
Tullow Oil Plc has made significant strides in its deleveraging strategy, announcing key asset disposals expected to generate $380 million in near-term cash proceeds as part of efforts to strengthen its balance sheet and optimise its portfolio.
The London-listed oil and gas company has signed a Sale and Purchase Agreement (SPA) for its entire Gabonese asset portfolio for a total cash consideration of $300 million, net of tax. The deal, which has already received approval from Gabon’s Ministry of Hydrocarbons, is expected to be completed by mid-2025, subject to outstanding conditions precedent.
In a parallel transaction, Tullow has entered into heads of terms for the sale of its entire working interest in Kenya for a minimum consideration of $120 million. The agreement also includes potential royalty payments, contingent on certain conditions, and an option for Tullow to re-enter future development phases with a 30% stake at no cost. A final SPA is expected soon, with $80 million of the proceeds anticipated to be received in 2025.
As of March 31, 2025, the company’s net debt stood at $1.6 billion, reflecting the timing of crude liftings. However, full-year free cash flow is forecast at $400 million, based on a $65/bbl oil price, which includes the disposal proceeds and around $50 million in overdue gas payments from Ghana carried over from 2024. Consequently, net debt is projected to decline to approximately $1.1 billion by year-end.
Tullow has also secured a key extension to its Revolving Credit Facility (RCF), now set to mature at the end of October 2025. The facility, reduced to $150 million to reflect lower working capital needs in a subdued oil price environment, will be fully repaid and cancelled upon completion of the Gabon asset sale.
Commenting on the developments, Tullow’s Chief Financial Officer and Interim CEO, Richard Miller, said:
“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.”
He added, “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.”
Miller also noted that the company is advancing plans to refinance its capital structure in 2025 and expects annual general and administrative (G&A) savings of approximately $10 million. These efforts, alongside a continued disciplined approach to capital allocation, are expected to underpin long-term value creation.
On the operational front, Tullow’s working interest production averaged 52.9 thousand barrels of oil equivalent per day (kboepd) in the first quarter of 2025, including 7.1 kboepd of gas. This performance was within guidance despite a planned two-week shutdown at the Jubilee field in Ghana.
The company maintained its 2025 production guidance of 50–55 kboepd, pending the completion of the Gabon asset sale. It has also kicked off its next drilling campaign in Ghana, with a new Jubilee producer well expected to come onstream in Q3 2025. Meanwhile, analysis of a 4D seismic survey conducted earlier in the year is underway to guide future drilling locations aimed at boosting reserves.
Tullow’s strategic pivot away from non-core assets and towards high-value growth in Ghana reflects its renewed focus on delivering shareholder returns, improving operational efficiency, and securing long-term financial sustainability.
