Tullow Oil has initiated a 4D seismic survey across its Jubilee and TEN fields in Ghana, a move aimed at pinpointing optimal sites for future wells and refining the company’s drilling programme for 2025 and 2026. The survey will also enhance understanding of pressure and fluid movements within the reservoirs, contributing to more efficient resource extraction.

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In a bid to sustain production levels, the company has ramped up water injection capacity at Jubilee to 300,000 barrels of water per day (kbwpd) since late 2024. This, combined with improvements in system reliability, is expected to slow production decline rates in 2025 compared to the latter half of 2024.Tullow’s drilling programme in Ghana is scheduled to commence in May 2025, utilizing the Noble Venturer rig.

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The initial phase will focus on drilling one production well and one injection well in the Jubilee field, with both expected to be operational by the third quarter of the year. After planned maintenance, the rig will resume drilling at the start of 2026, supporting production growth.Meanwhile, efforts to enhance the value of the TEN field remain a priority.

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Tullow is working to streamline operational costs and maximize the potential for further infill drilling, leveraging data from the ongoing 4D seismic survey.

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Tullow’s Chief Executive Officer, Rahul Dhir, highlighted the company’s progress in financial stability and strategic planning, stating:“Over the last four years, through our commitment to operational excellence and prudent implementation of efficiencies, we have continued to generate free cash flow and have significantly reduced our net debt from c.$2.81 billion to c.$1.45 billion.

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Our improved balance sheet, alongside the extension of our revolving credit facility, positions us well as we look to manage our debt maturities and optimise the Group’s capital structure in 2025.

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Following the successful resolution of the Ghana Branch Profits Remittance Tax arbitration and a return to drilling at Jubilee, combined with production optimisation activities to reduce decline rates and further cost reductions, 2025 is set to be an exciting year for Tullow as we lay the foundations for capital returns and pan-African growth.

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”As part of its financial strategy, the company is considering divestment of certain non-core assets to accelerate debt reduction, with a target of bringing net debt below $1 billion and gearing to less than one times. However, asset sales will only proceed if they deliver value for both equity and leverage.

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Tullow has earmarked approximately $250 million for capital expenditure in 2025, with 60% directed to Jubilee, 30% to non-operated assets, and the remaining 10% covering TEN, Kenya, and exploration efforts. Decommissioning costs are projected at $15 million for the UK and another $15 million allocated for Ghana and Gabon.

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Further cost-cutting measures are expected to yield annual savings of approximately $10 million, reducing general and administrative (G&A) expenses to around $40 million. Additionally, cash tax payments for the year are estimated at $200 million, assuming an oil price of $80 per barrel, with 60% of payments concentrated in the first half of the year.

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Tullow’s hedging strategy safeguards 60% of projected sales volumes at a weighted average price of $59 per barrel, while 60% of sales remain open to potential oil price increases. The remaining 40% is capped at a weighted average price of $89 per barrel.

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With forecast free cash flow of approximately $200 million at $80 per barrel—bolstered by $50 million in outstanding gas payments from Ghana in 2024—Tullow intends to repay its 2025 Notes at maturity using available cash and its Glencore credit facility. The company also plans to refinance its capital structure over the course of the year.

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Following this refinancing, Tullow aims to establish a clear strategy for capital returns and further expansion through acquisitions, with a new CEO expected to take charge of the company’s next phase of growth.

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