Investing.com -- Tullow Oil shares fell more than 3% on Monday after the Ghana-focused producer reported a wider first-half net loss of $101 million, compared with $80 million a year earlier, due to higher refinancing costs and tax charges. Stronger oil prices and production lifted revenue, while the company raised its full-year free cash flow guidance.
Net financing costs rose to $230 million from $139 million, including a $24 million loss on extinguishment of borrowings and $62 million of debt arrangement fees related to its refinancing.
Income tax expense jumped to $127 million from $30 million, resulting in an effective tax rate of 476.6% despite a $27 million pretax profit.
Revenue rose to $496 million from $411 million, while operating profit increased to $256.7 million from $89.4 million.
The realised oil price before hedging rose to $95 a barrel from $71.40, although hedging reduced revenue by $47 million. Sales volumes slipped to 29,900 barrels of oil equivalent per day from 30,200 boepd.
Working-interest production increased to 43.7 thousand boepd from 40.6 thousand boepd, including 7.5 thousand boepd of gas.
Tullow expects full-year production at the top end of its 34,000-42,000 boepd guidance range, while capital expenditure remains around $200 million.
The company raised its full-year free cash flow guidance to $170-250 million, based on oil prices of $70-100 a barrel.
First-half free cash flow was $4 million, compared with an outflow of $188 million a year earlier, helped by stronger operating cash flow and $40 million of proceeds from the Kenya disposal.
Net debt rose to $1.40 billion at June 30 from $1.35 billion at year-end, while adjusted EBITDAX for the 12 months fell to $743 million from $768 million. Tullow said liquidity headroom exceeded $250 million.
The company completed its refinancing in April, issuing $1.19 billion of senior secured notes due 2028 and $423 million of junior secured notes to Glencore.
The 2028 notes carry 10.25% cash interest, 3% paid in kind and 1.75% pay-if-you-can interest, while the Glencore notes carry SOFR plus 12.75% paid in kind.
Tullow's 2P reserves rose to 121.7 million barrels of oil equivalent from 100.2 million at the end of 2025, helped by extensions to Ghana licences through 2040 and drilling results. The company expects to lift 14 cargoes in 2026, including 11 from Jubilee and three from TEN.
Underlying cash operating costs fell to $82 million from $108 million, or $10.30 per boe from $14.60. Capital expenditure increased to $134 million from $103 million, with $130 million spent in Ghana.
Tullow has two disputed Ghana tax assessments totalling $387 million and faces a separate $170 million assessment from Kenya's tax authority related to the sale of its Kenyan subsidiary. It does not intend to recommend an interim dividend for 2026.
Original Article
Tullow Oil shares fall 3% as first-half loss widens
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