KEY POINTS
- Tullow extends $1.28 billion in senior notes maturity to November 2028.
- Glencore restructures $400 million facility into junior secured notes due 2030.
- Company cites commodity prices and delayed Ghana payments for cash flow pressure.
Tullow Oil has secured a refinancing agreement with Glencore and a majority of its bondholders. The deal extends the maturity of its debt by more than two years. The Africa focused producer is seeking breathing room after a difficult financial period.
The London listed oil and gas company said Friday it entered into a binding lock up agreement with holders of about 66 percent of its $1.28 billion in senior secured notes due in May 2026. The agreement also includes commodities giant Glencore, a long standing financing partner.
Debt maturities pushed back to 2028
Under the transaction, Tullow will release its existing senior secured notes. It will issue new extended notes that mature in November 2028. The move delays repayment deadlines and reduces overall cash interest costs.
Executives say the deal strengthens the company’s financial position. It allows Tullow to continue its investment program and focus on extracting value from its assets. The company has faced pressure in recent years from volatile oil prices, production setbacks and high debt.
The refinancing reshapes Tullow’s capital structure. Securing support from two thirds of noteholders helps the company avoid a prolonged restructuring process. It also gives management time to consider longer term funding options or asset sales.
Glencore reshapes its exposure
The agreement also affects Glencore’s $400 million secured notes facility. That facility will be written down to zero and released. Glencore will instead receive $400 million in new junior secured notes due in May 2030.
This change extends Glencore’s exposure while placing it lower in the repayment order. The arrangement signals continued backing from the trading house, which has strong commercial ties to Tullow’s West African operations.
The package includes a revolving cargo prepayment facility of up to $100 million for Tullow’s Ghana unit. The facility will run until November 2028.
Ghana operations central to financing plan
The prepayment facility will be backed by crude cargoes from the Jubilee and TEN fields offshore Ghana. Each advance will be repaid from the proceeds of cargo sales under existing offtake agreements.
The structure provides near-term liquidity tied to core producing assets. Ghana remains central to Tullow’s output. Stable production from Jubilee and TEN is key to recovery.
According to OilPrice, in a separate trading update, Chief Executive Ian Perks said full-year 2025 free cash flow was hurt by weaker commodity prices late in the year. Delays in payments from the Government of Ghana and postponed proceeds from the Kenya asset sale also weighed on results.
The refinancing eases immediate pressure. Investors are now likely to focus on operational performance in Ghana and tighter cost control as the company works toward a more stable footing.
