Tullow Oil Plc has announced $380 million in asset sales in Gabon and Kenya to cut debt and strengthen its focus on Ghana operations.
These moves aim to significantly reduce net debt and streamline the company’s operational focus on high-value growth opportunities in Ghana.
“The strengthening of our balance sheet continues to be the key priority for the team.
“There is renewed energy within the business following several recent key milestones, despite the challenging oil price environment.”
Richard Miller, Chief Financial Officer and Interim CEO of Tullow Oil
In a statement released this week, the London-listed oil and gas producer confirmed that it has entered a Sale and Purchase Agreement (SPA) to divest its entire Gabonese asset portfolio for a cash consideration of $300 million, net of tax.
The deal has already secured the approval of Gabon’s Ministry of Hydrocarbons and is expected to close by mid-2025, subject to the fulfilment of remaining conditions precedent.
Alongside the Gabon transaction, Tullow has signed heads of terms for the sale of its entire working interest in Kenya for a minimum consideration of $120 million.
This deal includes contingent royalty payments and an option allowing Tullow to re-enter future development phases with a 30% stake at no additional cost. The final SPA is expected imminently, with $80 million of the proceeds projected to be received within 2025.
Tullow’s Net Debt to Fall Below $1.1 Billion
As of March 31, 2025, Tullow reported net debt of $1.6 billion, largely influenced by the timing of crude liftings.
However, the company anticipates full-year free cash flow of $400 million at an oil price of $65 per barrel. This includes anticipated disposal proceeds and roughly $50 million in overdue gas payments from Ghana carried over from 2024.
“Our strategy to divest certain non-core assets to accelerate our deleveraging trajectory is progressing well.
“With the Gabon and Kenya asset sales, we are firmly on track to reduce our net debt to around $1.1 billion by year-end.”
Richard Miller, Chief Financial Officer and Interim CEO of Tullow Oil
Tullow also confirmed an extension of its Revolving Credit Facility (RCF) until October 2025.
The RCF has been reduced to $150 million in line with lower working capital needs in a subdued oil price environment. Upon completion of the Gabon deal, Tullow plans to fully repay and cancel the facility.
Beyond asset sales, Tullow is intensifying cost-cutting efforts to support long-term financial sustainability.
A company-wide cost optimisation programme is expected to generate approximately $10 million in annual net general and administrative (G&A) savings. Additionally, Tullow plans to refinance its broader capital structure later in 2025.
“These moves, combined with our disciplined capital allocation, lay a solid foundation for future value creation.”
Richard Miller, Chief Financial Officer and Interim CEO of Tullow Oil
Tullow’s operational performance in the first quarter of 2025 remained within guidance. The company recorded average working interest production of 52.9 thousand barrels of oil equivalent per day (kboepd), including 7.1 kboepd of gas.
This output was achieved despite a planned two-week shutdown at the Jubilee Field in Ghana.
The company has reaffirmed its 2025 production guidance of 50–55 kboepd, pending the Gabon asset sale. Tullow’s next drilling campaign in Ghana is underway, with a new producer well expected to come online in Q3 2025.
Moreover, analysis of a recent 4D seismic survey will guide future drilling decisions aimed at reserve growth and production optimisation.
Ghana at the Core of Future Strategy
Tullow’s recent announcements underscore a strategic shift towards its core operations in Ghana, where it continues to see long-term value.
The renewed focus on the Jubilee and TEN fields positions the company to improve asset performance and returns to shareholders.
This pivot away from non-core assets like Gabon and Kenya highlights Tullow’s drive to improve capital efficiency, strengthen its balance sheet, and focus on operations with the highest return potential.
