Tullow Oil - comment

Tullow Oil’s reconfirmation of upper-end production guidance will maintain current prices on the call constrained bonds, but the core dilemma remains unchanged: supportive oil prices and strong near-term cash generation offset by single-asset exposure and potentially material contingent liabilities.

The company expects production to land at the upper end of its 34–42k boepd range, first issued in November 2025, despite this already representing a downgrade from prior FY25 guidance of 40–45k boepd (FY25 actual: 40.4k boepd; FY24: 51.5k boepd). Jan–May production averaged 43.1k boepd, supported by strong gas output of 7.3k boepd, reinforcing confidence in the higher end of guidance. Cash flow has improved alongside higher oil prices, with Tullow’s May Jubilee cargo realising $119/bbl.  However, the company has provided no update on outstanding tax litigation.