Tullow Oil Beats Output Target, Raises 2026 Cash Flow View

Tullow Oil Plc has raised its 2026 free cash flow forecast by more than twofold after stronger-than-expected production from its offshore assets in the country,

higher oil price realisations and improved operational performance boosted the London-listed producer’s outlook.

The company now expects free cash flow of US$170 million to US$250 million for the year, up from its previous guidance of US$70 million to US$175 million, as output from the Jubilee and Tweneboa, Enyenra, and Ntomme (TEN) fields exceeded expectations.

Tullow said its latest drilling campaign, supported by advanced seismic data, delivered stronger reservoir insights that helped new Jubilee wells outperform forecasts, while production facilities maintained more than 99 percent uptime in the first half (H1) of 2026.

The revised outlook comes as Tullow seeks to strengthen its balance sheet, with gross debt reduced by about US$100 million to US$1.6 billion during the first half of the year, while the company targets further investment in Ghana through a planned drilling campaign of up to 10 wells from 2027.

 “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,” the Chief Executive Officer (CEO) of Tullow, Ian Perks, said in a statement ahead of the Group’s 2026 H1 results.

He further noted that 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 per barrel of crude oil (bbl).

“We are well positioned to continue delivery against our strategy and create value for stakeholders,” Mr Perks said.

Tullow reported that group production averaged approximately 43,700 barrels of oil equivalent per day (kboepd) in H1 2026, including about 7,500 barrels of oil equivalent per day of gas.

Production from Jubilee field averaged about 70,800 barrels per day (bpd) gross, with approximately 27,600 bpd net to Tullow, exceeding expectations. Output from the TEN fields averaged about 14,800 bpd gross, translating into around 8,100 bpd net to the company.

The company’s latest Jubilee drilling campaign has continued to deliver results, with the third well, J76-P, brought onstream in June recording initial production rates significantly above expectations.

The fourth well, J77-P, started production in July, while the fifth well, J50-P, came onstream in early August, with initial rates in line with forecasts.

Tullow said the success of the campaign was partly supported by insights from its 4D seismic data interpretation, which improved target selection and helped optimise drilling outcomes.

Outside Ghana, the company said production from the non-operated Espoir field in Côte d’Ivoire averaged about 600 barrels of oil equivalent per day, below expectations due to nearly two months of downtime between March and May. Tullow exited the licence on July 24, 2026, with operations transferred to Société Nationale d’Opérations Pétrolières de la Côte d’Ivoire (PETROCI) on behalf of the state.

Tullow recorded first-half sales revenue of about US$496 million, including approximately US$47 million in hedge costs.

The company said its pre-financing cash flow stood at about US$135 million, while free cash flow was US$4 million after US$64 million in cash interest payments and US$68 million in one-off refinancing transaction costs.

Gross debt declined by approximately US$100 million to US$1.6 billion during the period, following repayments linked to its refinancing transaction and a cash sweep payment in June. At the end of June, net debt stood at about US$1.4 billion, with liquidity headroom exceeding US$250 million.

Tullow expects full-year production in 2026 to reach the upper end of its guidance range of 34,000 to 42,000 barrels of oil equivalent per day.

The company also expects to lift 14 cargoes during the year, comprising 11 from Jubilee and three from TEN, two more Jubilee cargoes than initially projected. Six cargoes were delivered in the first half, with eight scheduled for the second half of the year.

Tullow said it is progressing plans for its 2027/28 Ghana drilling programme, which could involve up to 10 wells.

The company is also advancing projects including subsea pumps, additional drilling targets, gas monetisation and intervention activities aimed at converting resources in the Jubilee and TEN fields into reserves.

Source: thebftonline.com