Tullow Oil's 2026 outlook has improved after stronger production from Ghana’s Jubilee and TEN fields, better oil sales and progress on recovering money owed by the Government of Ghana pushed the company to lift its annual cash flow forecast.
The London listed producer now expects free cash flow of $170 million to $250 million at oil prices between $70 and $100 a barrel. Its previous range was $70 million to $175 million.
The figures were published in an unaudited trading statement ahead of Tullow’s half year results on September 28. They may still be revised.
Jubilee wells beat early estimates
Group production averaged about 43,700 barrels of oil equivalent per day during the first six months, including 7,500 barrels of gas. Tullow now expects full year production to finish near the upper end of its guidance range of 34,000 to 42,000 barrels per day.
Jubilee did much of the lifting. Gross production averaged 70,800 barrels of oil per day, with 27,600 barrels net to Tullow. TEN produced 14,800 barrels gross and 8,100 barrels net to the company. Both fields performed ahead of management’s plan.
Chief Executive Ian Perks said Tullow delivered a “strong operational performance,” with new wells “performing ahead of expectations.”
The J76 production well started flowing in June at rates significantly stronger than forecast. J77 followed in July, while J50 came online in early August. Initial output from the latter two matched expectations.
Tullow credited interpretation of new 4D seismic data with improving reservoir understanding and helping the partnership choose successful drilling targets.
Uptime across the Jubilee and TEN production vessels averaged more than 99 percent. That consistency mattered almost as much as the new wells.
Cash flow forecast receives major lift
Tullow plans to lift 14 cargoes in 2026, comprising 11 from Jubilee and three from TEN. That is two more Jubilee cargoes than the company expected when it issued its initial guidance in November 2025.
Six cargoes were delivered during the first half, with another eight planned before December. Their average selling price before hedging was about $95 a barrel and $86 after hedging. Hedging costs reached roughly $47 million.
The two cargoes lifted from Jubilee and TEN in July achieved an average of $87 a barrel. Across January to July, realised prices averaged about $93, helping to support the upgraded cash flow outlook.
Revenue rises, but refinancing takes cash
First half sales revenue reached approximately $496 million. Capital expenditure stood at $131 million, while decommissioning spending was $13 million. Both were in line with Tullow’s expectations.
The company generated $135 million in cash flow before financing. Free cash flow was only $4 million after $64 million in cash interest payments and $68 million in one off refinancing transaction costs.
That contrast is important. Operations generated cash, but the work required to repair the balance sheet absorbed most of it during the period.
Gross debt declined by approximately $100 million to $1.6 billion. Tullow repaid $148 million through its April refinancing and a June cash sweep, although $48 million of new debt and capitalised interest partly offset that reduction.
Net debt stood at about $1.4 billion at June 30, with liquidity headroom above $250 million. The company also received an extra $9 million after terminating royalty payments and a back in right linked to its former Kenyan interests.
Ghana remains central to the plan
Tullow has increasingly rebuilt its business around Ghana after selling other assets and completing a refinancing. Its Jubilee and TEN licences have been extended to 2040, creating room for further investment.
The final well in the current Jubilee campaign, the J73 water injector, is expected online in September. Work is also progressing on a rig contract for up to 10 wells from the second half of 2027.
Subsea pumps, additional drilling, gas commercialisation and well interventions are being assessed to convert more Jubilee and TEN resources into reserves. Full year capital spending remains forecast at $200 million, with decommissioning expenditure of $25 million.
Tullow’s numbers point to a stronger operating year. The test now is whether higher production, Ghana receivables and oil prices can turn that momentum into the much larger free cash flow it has promised for 2026.
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