Tullow - comment

Tullow remains without a clear strategic direction, with the first half results offering little additional clarity. Jubilee production came in below expectations, and alongside weaker oil prices, this led to a downgrade in free cash flow guidance. While headline free cash flow is reported at $300m, this figure includes $380m from disposal proceeds and overdue gas receipts. Year-end net debt is expected to be around $1.1bn, equating to approximately 1.3 times leverage.

Tullow is currently subject to two disputed tax assessments, both of which are scheduled for initial hearings in 2025. One case was due for tribunal in late June but was postponed to allow more time for settlement discussions. The timing of any resolution remains uncertain, further contributing to the lack of clear direction for the group. The 2026 Notes, due in May next year, may require an extension if this uncertainty persists.