Tullow Oil: Maturity wall? Ghana be tricky

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Tullow Oil: Maturity wall? Ghana be tricky

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Tullow Oil

Maturity wall? Ghana be tricky

Reinstating Coverage: UNDERPERFORM | PO: 5.30 GBp | Price: 12.88 GBp

Underestimated risks to equity = Underperform 23 June 2026

We reinstate coverage on Tullow Oil with an Underperform rating and a 5.3GBp PO, Equity

implying ~60% potential downside. We argue the current market equity valuation

underprices substantial refinancing risk ahead of a fast-approaching debt maturity wall Cian Evans-Cowie >> Research Analyst

in 2028. Furthermore, with diminishing diversification (the company’s (depleted) proved MLI (UK)

reserves are now exclusively located in Ghana and subject to steep natural decline rates), +44cian.evans-cowie@bofa.com20 7995 0940

we see little reason to believe the shares will rerate from here. Risk/reward looks Christopher Kuplent >>

skewed to the downside. Research Analyst

MLI (UK)

$1.4bn 2028 maturity wall = cash shortfall +44christopher.kuplent@bofa.com20 7995 8222

Tullow’s 2028 debt maturity wall (amounting to a total of ~$1.4bn (>5x market cap)) will Matthew Smith >>

keep ramping up the concern for equity investors as it draws nearer. In our commodity Research Analyst

price base case, we see a cash shortfall of ~$800m. In other words, we calculate an +44 20 7996 7109

additional >$45/bbl would be needed on top of our base case prices every year for matt.smith1@bofa.com

Tullow to meet its debt obligations in 2028 (see Exhibit 8). This looks fanciful and we

believe the share price fails to adequately price the refinancing risk.

Previous refinancing leaves portfolio looking depleted Stock Data

Earlier this year, Tullow completed a large-scale refinancing deal that pushed its debt Price 12.88 GBp

maturities from 2026 and 2028 to 2028 and 2030.