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Tullow Oil PLC on Friday warned that production will come in at the lower end of guidance for 2025 and fall further in 2026. Tullow shares were down 31% to 5.90 pence in London on Friday morning following the announcement. In a trading update, the oil and gas producer in Ghana and the Ivory Coast said group output for the 10 months to October 31 averaged around 40,700 barrels of oil equivalent per day. Tullow expects full-year 2025 production to land at the lower end of its 40,000 to 45,000 barrels per day guidance range. For 2026, it forecasts a reduced range of 34,000 to 42,000 barrels per day, reflecting the ongoing decline in its existing well stock and the pace of new wells being brought online. The update comes as Tullow ‘engages with bondholders, commodity traders and other private sources’ on refinancing its capital structure, including ahead of a bond maturing in May 2026. Given market risks and operational performance, Tullow said it is also exploring ‘alternative options’ with creditors, including amend-and-extend measures and liability management exercises. Chief Executive Officer Ian Perks, who joined in September, said his focus remains on improving operational efficiency in Ghana, cutting costs and securing a sustainable refinancing. Tullow confirmed it continues to face challenges from natural decline at Jubilee and TEN, although recent drilling has delivered ‘early successes’. A five-well drilling programme is approved for 2026, including three producers and a water injector. Jubilee production averaged 61,000 barrels per day gross to end-October, while TEN averaged 16,000 barrels. FPSO uptime across both fields was 97%. The firm also highlighted progress in Ghana on extending production licences for Jubilee and TEN to 2040, alongside a new gas sales agreement which confirms the current gas price to the end of the licences. Receivables from the Ghanaian government remain a pressure point. Tullow said total amounts due, including TEN development debt and overdue cash calls, exceeded $200 million as of October 31. It included around $100 million of outstanding gas receivables in its $300 million free cash flow guidance for 2025, which it reaffirmed. Capital expenditure guidance for 2025 is unchanged at $185 million, with decommissioning spend of $20 million. Year-end net debt is expected at around $1.2 billion. Tullow continues to target $10 million in cost savings this year and $50 million over three years compared to 2024. Looking into 2026, the company guided to capital expenditure of about $200 million, decommissioning spend of $25 million, and pre-financing cash flow of $70 million to $100 million at an oil price of $65 a barrel. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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