Tullow - comment

Tullow increased the size of their tender and bought back $166m of bonds at an average price of 60.05% spending $100m, in line with our expectation of $160m at 62%. We expected Tullow to increase the size of the tender to $100m.  Tullow were unable to increase further due to restrictions from their covenants in our calculations. The highest price paid in the auction was 65%. 

In our report, we highlight some other options available to the Company to deleverage further, and this concurs with Tullow’s statement of “continuing to progress a range of options to address the remainder of the 2025 Notes”. Encouragingly, the Company highlight the start-up of the Jubilee South East development now, which will move Gross production at Jubilee above 100,000 boepd, and generate further free cashflow for H2 and beyond. We would expect further buybacks in the H2 when cash flow allows.