- Tullow Oil
- 07 August 2025 13:17:23
Source: Sharecast
Canaccord Genuity noted that Tullow was in the process of refinancing $1.285bn loans, currently maturing 15 May 2026, a process that it thinks can be achieved, but said the price may be "steep".
Unfortunately, Canaccord said that while those discussions are ongoing, Tullow's primary asset, the Jubilee field in Ghana, has "wobbled", producing roughly 61,000 gross barrels of oil per day in H125, compared with 87,000 a year earlier.
Furthermore, Canaccord pointed out that Tullow has "no more jewels to sell" following its successful exit from Gabon and the anticipated sale completion in H225 of its Kenyan assets.
The Canadian bank noted that additional cost savings were underway and that there were potential contingent receipts from previous asset sales, which together will help, but pointed out that the crux of the programme to reduce net debt and support equity value was the performance of Tullow's Jubilee field.
"There are some green shoots at the field; a new producer came online late July (producing 'decently'), another well is expected to contribute from late 2025 and four more planned for 2026, activities to fully restore water injection rates in H2 25 are underway, and there is new seismic to help shape longer-term field management," said Canaccord, which reiterated its 'hold' rating on the stock.
"All positive steps, and the company appears confident, but in our view assessing the dynamics of the natural field declines, the concerning increased water-cut from some producers, and the sustained performance benefits of the new wells, is extremely challenging. It is how that combination unfolds, alongside of course oil prices, that will principally determine the equity value."
Reporting by Iain Gilbert at Sharecast.com