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
锟� 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.
锟� Glencore's existing $400 million secured notes facility released and issuance of new Glencore Junior Notes maturing 15 May 2030.
锟� 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.
锟� Existing equity remains in place and no new shares are anticipated to be issued in connection with the Refinancing Transaction.
锟� 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.
锟� 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:
锟� Extension of the Petroleum Agreements in Ghana to 2040;
锟� 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;
锟� Heads of Terms agreed for TEN gas supply to the end of the extended licence period, establishing a long-term gas monetisation pathway;
锟� 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;
锟� Jubilee drilling programme targeting four additional wells, with production enhancements through multi-phase pumps;
锟� Continued focus on cost optimisation and operational efficiency; and
锟� 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, 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.