Tullow Oil plc

Tullow reported H1 2026 production of 43,700 barrels of oil equivalent per day, up more than 7% versus H1 2025. Average realized price before hedging was $95 a barrel, with a highest-ever Tullow cargo price of about $130 a barrel in April and another cargo priced at $119 a barrel this month. Operating cash flow was $222 million in the first half, while free cash flow was $4 million, weighed down by $70 million of one-off refinancing costs, timing of CapEx, and the fact that only six cargoes were lifted in H1 versus eight in H2. Full-year guidance was reiterated for production at 34,000 to 42,000 boe/d and CapEx at $200 million, while decommissioning spend guidance was reduced from $25 million to $15 million. Free cash flow guidance was upgraded to $170 million-$250 million, and year-end net debt was forecast at $1.2 billion inclusive of accrued PIK interest. Management also said it made a $48 million bond repayment in June and expects another repayment in November.

Ian Perks framed the quarter as evidence that the company’s operational reset is working, saying Tullow has built a stable foundation that is now translating into “positive results.” He pointed to stronger well stability, better power reliability, improved water injection management, and top-quartile drilling performance as the main drivers of the improvement. He also stressed that 4D seismic and upcoming OBN data are helping de-risk future campaigns and uncover new growth opportunities around Jubilee and TEN, while saying near-term upside is still being pursued in a disciplined way.

Richard Miller highlighted the hard financial outcomes: 43,700 boe/d of production, $95/bbl average realized price before hedging, $222 million of operating cash flow, and $4 million of H1 free cash flow after $70 million of refinancing costs. He said the company now expects stronger H2 cash generation with eight cargoes versus six in H1, has kept full-year CapEx at $200 million, and reduced decommissioning guidance to $15 million. He also noted the April refinancing lowered cash interest costs by over $50 million per year, extended maturities, and improved liquidity through the $100 million Glencore facility, while year-end net debt is forecast at $1.2 billion inclusive of accrued PIK interest.

Analysts focused on why operational performance improved so sharply, what the 4D seismic and upcoming OBN data are showing, and how Tullow thinks about price realizations versus the forward curve. Management said performance is being driven by tighter operational discipline, better well and riser management, power and water-injection optimization, and strong drilling execution; 4D data helped avoid a poor well in the current campaign, while OBN will further improve accuracy for option wells. On pricing, Richard Miller said prompt cargo prices have diverged materially from the screen this year and that the company hedges to Dated Brent, which leaves upside if the premium persists. Questions also addressed Ghana tax disputes and refinancing: management said the tax provision increase reflects current discussions and can be offset against receivables, while the refinancing is targeted for the second half of 2026 with a trader-led and bank-supported structure.