Tullow - comments

Tullow is due to release a January trading statement on the 26th, where they will outline their production guidance for FY22. Based on current production, we expect Tullow to guide 44k-48k boepd for their post-acquisition Ghanian fields ownership. Our current model is expecting c.45k, and therefore we are not updating the model before the release.

The recent rally in oil prices has wakened the equity markets, with Tullow reaching 60p. We are surprised that the 7% 2025 are still trading 350-400bps wider than the secured bonds and this gap is not justified.

The Petroleum Commission, Ghana, has updated the Gross production figures for Jubilee and TEN fields for December. Figures are updated in the graphs below.

Re: Kenya, the Field Development Plan was submitted in line with the conditions of the licenses and we await feedback from the Kenyan government on it. It should be noted that the infrastructure (pipework) is larger than previously planned which is encouraging for the overall production levels of the field. We fully expect Tullow to farm down their stake in order to fund the large CAPEX to progress to production stage and do not envisage any positive cashflow from the farm-down.