Tullow Oil reports loss as production, oil prices decline

(Sharecast News) - Tullow Oil reported a first-half loss on Wednesday, as production volumes and realised oil prices declined, with the company reiterating that refinancing its capital structure remains its top strategic priority. For the six months ended 30 June, Tullow posted revenue of $524m, down from $759m a year earlier, with group working interest production averaging 50,000 barrels of oil equivalent per day, including 7,100 daily equivalent barrels of gas.

Excluding the impact of its now divested Gabon operations, production averaged 40,600 barrels of oil equivalent per day.

The group recorded a net loss after tax of $61m, compared to a profit of $196m in the same period last year.

"Our 2025 strategic priorities remain clear: refinancing our capital structure, optimising production, increasing reserves, and completing the sale of our Kenyan assets, having already realised $300m proceeds from the sale of our portfolio of assets in Gabon," said chief financial officer and interim CEO Richard Miller.

Miller noted that Tullow had restarted drilling at the Jubilee field in Ghana and successfully brought the first of two planned wells onstream with "better than expected net pay".

A memorandum of understanding signed in June with the Ghanaian government is expected to extend production licences for both Jubilee and TEN to 2040, unlocking further reserves and value.

Despite the sale of its Gabon assets, Tullow's net debt stood at $1.6bn at the half-year mark, up from $1.45bn at year-end 2024.

Free cash flow was negative $188m, reflecting tax payments, lifting schedules, and maintenance costs at Jubilee.

The company reiterated its year-end net debt guidance of around $1.1bn, and said it expected gearing to fall to approximately 1.3 times net debt to EBITDAX.

Tullow said it expected full-year production to be at the lower end of its 40,000 to 45,000 barrels of oil equivalent per day guidance range, and it maintained full-year capital expenditure guidance at around $185m.

The company also confirmed the successful repayment and cancellation of its $150m revolving credit facility using part of the Gabon proceeds.

Looking ahead, Tullow said it was focused on completing a holistic refinancing of its debt structure before May 2026, when $1.3bn of notes fall due.

Management said it was in ongoing discussions with banks, traders, and private funding sources, though it acknowledged this refinancing remains subject to market conditions and agreement with creditors.

Tullow said that failure to complete the refinancing in time would pose a material risk to the company's ability to continue as a going concern, but the board said it remained confident in its ability to secure new funding.

At 1107 BST, shares in Tullow Oil were down 16.76% at 11.92p.

Reporting by Josh White for Sharecast.com.