Tullow Oil Loss Widens as Higher Financing Costs Offset Stronger Revenue and Operating Performance

The company reported a net loss of $101 million for the first half, compared with $80 million a year earlier. Net financing costs increased to $230 million from $139 million, while tax expense rose to $127 million from $30 million.

The deterioration came despite a significant improvement in operating performance. Revenue increased to $496 million from $411 million, while operating profit rose to $256.7 million from $89.4 million. Tullow's realised oil price before hedging increased to $95 a barrel from $71.40, although hedging reduced revenue by $47 million.

Working-interest production also increased to 43.7 thousand barrels of oil equivalent per day from 40.6 thousand boepd. Sales volumes, however, declined slightly to 29,900 boepd from 30,200 boepd.

The company's financial position remains closely linked to the cost of servicing its debt. Tullow completed a refinancing in April, issuing $1.19 billion of senior secured notes due in 2028 and $423 million of junior secured notes to Glencore. The 2028 notes carry a 10.25% cash interest rate, while the Glencore notes carry SOFR plus 12.75% paid in kind.

Despite the higher financing burden, the company raised its full-year free cash flow guidance to between $170 million and $250 million, based on an oil-price assumption of $70 to $100 a barrel. First-half free cash flow improved to $4 million from an outflow of $188 million a year earlier.

Tullow also reported that its 2P reserves increased to 121.7 million barrels of oil equivalent from 100.2 million at the end of 2025, helped by extensions to its Ghana licences and drilling results.

The results illustrate the contrasting effects of higher oil prices on leveraged producers. Stronger commodity prices can improve operating cash generation, but refinancing costs, taxes and debt obligations can absorb a substantial portion of those gains.

For Tullow, future performance will therefore depend not only on production and oil prices but also on debt management, capital discipline and the company's ability to convert operational improvements into sustainable free cash flow.

The combination of stronger production, increased reserves and elevated financing costs leaves the company balancing investment requirements against the need to strengthen financial resilience.