REG - Tullow Oil PLC - Refinancing Transaction and Lock-Up Agreement

Tullow OilAnnouncement

Yesterday 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260220:nRST8202Ta&default-theme=true

RNS Number : 8202T  Tullow Oil PLC  20 February 2026

Tullow Oil plc

Tullow announces Refinancing Transaction and Lock-Up Agreement with c.66% of
its Noteholders and Glencore

20 February 2026 - Tullow Oil plc ( "Tullow" or the "Company") is pleased to
announce that it has entered into a binding Lock-Up Agreement to implement a
refinancing transaction (the "Refinancing Transaction") with holders of c.66%
of its $1,285,245,000 10.25% senior secured notes due May 2026 (the "Senior
Secured Notes", and the holders thereof, the "Noteholders") and with Glencore
Energy UK Limited ("Glencore"). A management presentation will be published
today on the Tullow website: www.tullowoil.com

This is an important milestone for Tullow as the Refinancing Transaction
releases its Senior Secured Notes and issues new Extended Notes with a
maturity increased by over two years to November 2028, reduces total cash
interest and provides a stable platform for Tullow to deliver its investment
programme and realise the full value of its assets to support a longer term
refinancing and/or explore asset value maximisation opportunities.

Ian Perks, Chief Executive Officer of Tullow, commented:

"Securing support from c.66% of Noteholders alongside Glencore is a strong
vote of confidence in our assets, our team and our strategy. By extending
maturities and optimising our cash interest profile, we have secured the
financial runway to improve performance, execute our business plan and secure
additional value for stakeholders.

"We will continue to work closely with all of our stakeholders, including the
Government of Ghana, given the national importance of our assets. With this
strong creditor support in place, we expect the Refinancing Transaction to
complete in the second quarter of 2026."

Key features of the Refinancing Transaction

·      Release of Senior Secured Notes and issuance of new Extended
Notes maturing 15 November 2028, together with a paydown of at least $100
million, extending the Company's debt maturity profile and creating runway to
deliver the investment programme and realise asset value.

·      Glencore's existing $400 million secured notes facility released
and issuance of new Glencore Junior Notes maturing 15 May 2030.

·     Strengthened liquidity position through a new $100 million super
senior Cargo Prepayment Facility provided by Glencore, complemented by a
reduced all-in cash interest profile through Payment-In-Kind (PIK) only
interest on the Glencore Junior Notes.

·      Existing equity remains in place and no new shares are
anticipated to be issued in connection with the Refinancing Transaction.

·    Governance will be enhanced, following the transaction, including
appointment of at least three new independent non-executive directors and
formation of a dedicated board sub-committee to oversee a disciplined process
for value-maximisation from the Company's asset base.

·      Lock-Up Agreement already supported by c.66% of Noteholders and
Glencore committing to implement the Refinancing Transaction via a Consent
Solicitation if over 90% of Noteholders accede to the Lock-Up Agreement, or an
English restructuring plan.

 

Aligning capital structure with near-term value catalysts

The Refinancing Transaction stabilises the Company's capital structure and
aligns it with expected 2026 operational catalysts and potential 2P reserve
additions. It provides the financial flexibility to demonstrate production
performance, optimises cash outflow during the extension period and
establishes a coherent framework to realise the full value of Tullow's assets.

Near-term value catalysts in 2026 include:

·      Extension of the Petroleum Agreements in Ghana to 2040;

·      Resolution with the Government of Ghana on tax disputes and
receivables, with a payment security mechanism for all gas receivables to
strengthen cash flow visibility;

·      Heads of Terms agreed for TEN gas supply to the end of the
extended licence period, establishing a long-term gas monetisation pathway;

·      Acquisition of the TEN FPSO on behalf of the joint venture,
expected to complete at the end of the first quarter of 2027 and funded from
in-year TEN cash flow, delivering significant cost savings and removing the
annual lease obligation;

·      Jubilee drilling programme targeting four additional wells, with
production enhancements through multi‑phase pumps;

·      Continued focus on cost optimisation and operational efficiency;
and

·      Interpretation of 4D and OBN seismic data to unlock future
drilling campaigns at Jubilee and TEN, long-term TEN gas development to meet
growing domestic demand, and further production enhancements including
multi-phase pumps and riser-based gas lift.

 

Summary of agreed terms

The Senior Secured Notes will be written down to zero and released and holders
of Senior Secured Notes will receive an equal amount of new senior secured
notes to be issued by the Company or a new intermediate holding company (the
"Extended Notes"), maturing on 15 November 2028. On the Closing Date, all
accrued but unpaid interest on the Senior Secured Notes will be paid in cash.
On the day after the Closing Date, at least $100 million of the Extended Notes
will be redeemed at par (the "Closing Date Notes Redemption"). Interest on the
Extended Notes will be 10.25% cash, 3.00% PIK and 1.75% Pay-If-You-Can (PIYC)
per annum on a quarterly basis. Call protection will be 101% for the life of
the Extended Notes, excluding the Closing Date Notes Redemption. The documents
will include a scheduled semi-annual cash sweep of freely available cash and
additional sweeps to be tested when certain cash inflows occur (including
certain tax receivables), each as described in the commercial term sheet.

The $400 million secured notes facility provided by Glencore (the "Glencore
Facility") will be written down to zero and released and Glencore will receive
an equal amount of new junior secured notes (the "Glencore Junior Notes").
Accrued interest and a 0.50% PIK lock-up fee will be capitalised into the
Glencore Junior Notes. The Glencore Junior Notes will bear interest at SOFR
plus 12.75% PIK per annum with an additional 0.75% PIK if the Mean Assessment
for Platts Dated Brent for the relevant period exceeds $65/bbl, and will
mature on 15 May 2030. The Glencore Junior Notes will rank junior to the
Extended Notes in respect of guarantees, security and enforcement under an
amended intercreditor agreement.

In addition, Tullow Ghana Limited will enter into a revolving cargo prepayment
facility (the "Cargo Prepayment Facility") of up to $100 million with
Glencore, maturing on 15 November 2028, ranking super senior secured and
benefiting from the same security package and guarantees as the Extended
Notes. The Cargo Prepayment Facility is drawn against designated Jubilee and
TEN cargoes under the existing offtake arrangements, with each advance repaid
from the relevant cargo sale proceeds. Interest will be charged at SOFR plus
4.50% per annum. An upfront fee of 1.0% of the total facility amount will be
payable at closing.

Unless a legally binding sale and purchase agreement has been entered into by
30 September 2027, the maturities of the Extended Notes and the Cargo
Prepayment Facility will be brought forward to 15 May 2028.

The first-ranking, all-asset security package will be maintained and enhanced
with a single point of enforcement at the Company and new intermediate holding
companies (New Holdco 1 and New Holdco 2). The Extended Notes, the Glencore
Junior Notes, and the Cargo Prepayment Facility are secured by the same
security package. The existing intercreditor agreement will be amended and
restated on an LMA-based framework to reflect the revised ranking and
enforcement provisions. Application of M&A or disposal proceeds (where
required to be applied) and enforcement proceeds will follow the Amended
Intercreditor Agreement, with the Cargo Prepayment Facility ranking first,
followed by the Extended Notes (pari passu with permitted senior secured
hedging), and then the Glencore Junior Notes. In all other cases, the Extended
Notes (pari passu with any permitted senior secured hedging) rank ahead of the
Cargo Prepayment Facility and Glencore Junior Notes. Any surplus proceeds
would be available for distribution to shareholders. The Extended Notes,
together with any permitted senior secured hedging, will constitute the
instructing group for enforcement.

At least three new independent non-executive directors ("INEDs") will be
appointed by the Board from lists provided by the creditors. The INEDs and
Executive Directors will form a board-level committee to oversee a disciplined
process for value-maximisation from the Company's asset base. The definitive
documents will also provide for independent oversight of annual budgets. In
the event certain of the governance conditions are not met or adhered to an
Event of Default will be triggered. These arrangements will not affect
day-to-day operatorship or joint-venture decision-making.

The Refinancing Transaction does not involve any dilution of existing
shareholder equity. The Company's shares will continue to be listed on the
London Stock Exchange and the Ghana Stock Exchange.

Lock-Up Agreement

Tullow has entered into a Lock-Up Agreement dated 20 February 2026 with
holders of c.66% of its Senior Secured Notes (the "Consenting Senior Secured
Noteholders") and with Glencore as the holder of the Glencore Facility
(together, the "Consenting Creditors").

Under the Lock-Up Agreement, holders of the Senior Secured Notes who sign on
the date of the Lock-Up Agreement or accede within five business days
thereafter (the "Early‑Bird Consenting Holders") will receive: (i) a 1.00%
early‑bird fee in cash; and (ii) an in‑kind fee, payable in the form of
Extended Notes, equal in aggregate to 5.00% of the principal amount of Senior
Secured Notes held by non-consenting holders of the Senior Secured Notes
("Non‑Consenting Holders"), allocated pro rata to Early‑Bird Consenting
Holders as at the Allocation Time (being 5pm (NY time) on the day prior to the
Closing Date). Extended Notes will be issued to Early‑Bird Consenting
Holders at 100% issue price and to Non‑Consenting Holders at 95%. Glencore,
as an original party to the Lock‑Up Agreement, will receive a lock‑up fee
equal to 0.50% of the principal outstanding under the Glencore Facility on the
Closing Date, payable in PIK and added to the Glencore Junior Notes. In
addition, a transaction consent fee will be paid to Glencore comprising $5
million in cash on the Closing Date and $25 million of additional Extended
Notes to be issued to Glencore by way of private placement promptly following
completion of the initial $100 million redemption of Extended Notes. Payment
of the foregoing fees is conditional on continued compliance with the
Lock‑Up Agreement through the Closing Date; no lock‑up fee is payable to
Non‑Consenting Holders or to Glencore if it is not an original party.

Implementation and next steps

The Consenting Creditors have agreed to support and take all steps required to
implement the Refinancing Transaction, whether by way of consent solicitation
or, if necessary, a restructuring plan under Part 26A of the Companies Act
2006.

If over 90% of holders of Senior Secured Notes accede to the Lock-Up
Agreement, the Refinancing Transaction will be implemented by way of consent
solicitation, the timetable for which will be announced promptly upon the 90%
threshold being achieved. The early-bird deadline for accession to the Lock-Up
Agreement is 27 February 2026.

To ensure timely completion, court dates have also been reserved for a
convening hearing during the week commencing 16 March 2026 and a sanction
hearing during the week commencing 20 April 2026 should the restructuring plan
route be utilised.

Eligible holders who wish to become party to the Lock-Up Agreement may accede
by executing a creditor accession letter. The commercial term sheet, the
Lock-Up Agreement and accompanying notices will be made available on a
password-protected portal at https://deals.is.kroll.com/tullow
(https://deals.is.kroll.com/tullow) , which is maintained by Kroll as
information agent. To request access, visit the portal, acknowledge the
disclaimer and request a password. Once received, log in to review the
documentation and complete accession online. A Word version of the creditor
accession letter is available from the information agent on request.

 

 CONTACTS
 Investor Relations

 ir@tullowoil.com                    Media

                                   Camarco
 Matthew Evans

                                   (+44 20 3781 9244)

                                     Billy Clegg

                                     Georgia Edmonds

                                     Rebecca Waterworth

 Information Agent

 Kroll Issuer Services Limited       Advisers to the Company

 https://deals.is.kroll.com/tullow   PJT Partners: tullow_2026_pjt@pjtpartners.com

                                     Latham & Watkins: projectturbo2025.lwteam@lw.com

                                     Advisers to the Noteholder Ad Hoc Group

                                     Houlihan Lokey: frg.hlprojecttreacle@hl.com

                                     Weil, Gotshal & Manges: weilrx.projecttreacle@weil.com

 

Notes to editors

Tullow is an independent energy company that is building a better future
through responsible oil and gas development in Africa. The Company's
operations are focused on its core producing assets in Ghana and Tullow is
committed to becoming Net Zero on its Scope 1 and 2 emissions by 2030 and has
a Shared Prosperity strategy that delivers lasting socio-economic benefits for
its host nations. The Company is quoted on the London and Ghanaian stock
exchanges (symbol: TLW). For further information, please refer to:
www.tullowoil.com (http://www.tullowoil.com/) .

 

Follow Tullow on:

LinkedIn: www.linkedin.com/company/Tullow-Oil
(http://www.linkedin.com/company/Tullow-Oil)

X: www.X.com/TullowOilplc (http://www.X.com/TullowOilplc)

 

Forward-Looking Statements

This document includes forward-looking statements. Whilst these
forward-looking statements are made in good faith, they are based upon the
information available to the Group at the date of this document and upon
current expectations, projections, market conditions and assumptions about
future events. These forward-looking statements are subject to risks,
uncertainties and assumptions about the Group and should be treated with an
appropriate degree of caution.

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No 596/2014 (as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018 as amended by virtue
of the Market Abuse (Amendment) (EU Exit) Regulations 2019). Upon publication
of this announcement, this inside information will be considered to be in the
public domain. The person responsible for arranging the release of this
announcement on behalf of Tullow is Adam Holland, Company Secretary.

This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or the solicitation of an offer to purchase, subscribe
for or otherwise acquire, or to sell, transfer or otherwise dispose of, any
securities or the solicitation of any vote or approval in any jurisdiction,
whether pursuant to this announcement or otherwise.

The release, publication or distribution of this announcement in, into or from
jurisdictions outside the United Kingdom may be restricted by law and
therefore persons into whose possession this announcement comes should inform
themselves about, and observe, such restrictions. Any failure to comply with
the restrictions may constitute a violation of the securities law of any such
jurisdiction.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  AGREAKAEASAKEEA



            Copyright 2019 Regulatory News Service, all rights reserved