Tullow Oil - comment

The exit of Tullow from its Kenyan operations is confirmation that the equity story is dead. Tullow Oil have agreed heads of terms for 100% of its interests in Kenya for $120m, $40m of which is payable on completion and an additional $40m by June 2026 at the latest. Tullow retains some optionality, entitling them to future royalty payments and an ability to re-tale a 30% participation in future development phases. 

But be under no illusion, this is Tullow selling what it can to assist its refinancing and deleveraging efforts. The equity story is over, and the senior secured bonds are now 100% exposed to Ghanaian operations. We would expect Tullow to be working on selling the remaining non-core asset and monetise the Ugandan contingent payment.