Member Info for xxnjr

Dallas -February 20, 2026 - Kosmos Energy (NYSE/LSE: KOS) ("Kosmos" or the "Company") is pleased to confirm that the license extensions for the West Cape Three Points and Deepwater Tano Petroleum Agreements, which cover the Jubilee and TEN fields in Ghana, have been formally ratified by the Ghanaian parliament. The licenses now extend to 2040.

The license extensions bring key benefits to Ghana including up to $2 billion in incremental investment as well as higher volumes of affordable gas from the fields for domestic power generation. Kosmos is pleased to have played a leading role in progressing, negotiating and executing these extensions. As part of the extensions, the amended Jubilee plan of development will include up to 20 additional wells in the field and, as a result, Kosmos expects to realize an increase in Jubilee 2P reserves.

At the Jubilee field, the J74 well that came online in early January is now fully ramped up. Gross daily production from the well is ~13,000 barrels of oil per day (bopd), increasing average gross Jubilee oil production to over 70,000 bopd in February month-to-date, in line with Kosmos expectations. The first well of the five-well 2026 drilling campaign, J75, has been drilled, encountering approximately 40 meters of net pay. J75 is expected to be completed in three zones, similar to the J74 and J72 wells, and is expected online around the end of the first quarter.

Paris, 19 February 2026

N° 08-26

M&P included in OFAC’s General License 50A

related to Venezuela

Etablissements Maurel & Prom S.A. (“M&P”, the “Group”) is pleased to announce that it has been included in

General License 50A (“GL 50A”) issued by the U.S. Department of the Treasury’s Office of Foreign Assets

Control (“OFAC”) on 18 February 2026. GL 50A replaces and supersedes GL 50 in its entirety and expressly

lists M&P among the limited number of authorised entities.....

......Olivier de Langavant, Chief Executive Officer of M&P, declared: “This is an important and constructive

development for M&P. The clarity provided by GL 50A will enable us to operate with confidence and to

participate in the sustainable growth of Venezuela’s oil sector. Our teams are fully mobilised on Urdaneta

Oeste and ready to advance the next phases of the field’s development.”

All sounds good to me. We should get that M&P release in the morning or maybe within a few days.

Q) M&P are owed quite a large sum going back years from PDVSA and under a previous GL thet began to start to recover some of the debt. Then that GL as we now became inoperative. Now looking at todays 50A it says "Except as provided in paragraph (b)...... (b) This general license does not authorize:....... "((1) Payment terms that ..... "involve debt swaps" so do we think that precludes recovering past arrears from PDVSA or does it mean something else?

A) You’re highlighting the difference between debt recovery (getting paid back) and debt swaps (trading debt for something else).

Under General License 50 (GL 50), the prohibition on "debt swaps" in paragraph (b)(1) is a specific restriction on the method of payment, not necessarily an outright ban on recovering past arrears.

Here is how that clause typically functions in this context:

1. What "Debt Swaps" Means Here

In OFAC terms, a debt swap usually refers to a transaction where a creditor (like M&P) would "swap" the debt PDVSA owes them for a new asset, equity in a project, or potentially a discount on future oil in a way that creates a new financial instrument.

The Restriction: OFAC wants to prevent companies from bypassing the new financial controls by "trading" old debt for new investments without money moving through the approved Foreign Government Deposit Funds account.

2. Recovering Arrears vs. Swapping Debt

Authorized Recovery: Under previous licenses (like GL 44), M&P had an agreed mechanism to recover its $914 million in arrears by allocating a portion of the revenue from their mixed company (Petroregional del Lago).

GL 50 Framework: GL 50 authorizes "all transactions ordinarily incident and necessary" to oil and gas operations. This typically includes the payment of invoices for past services or goods.

The Catch: While you can recover arrears, the payment terms must be "commercially reasonable". If the recovery is structured as a simple cash-off-the-top from production (as M&P previously arranged), it may not be viewed as a "debt swap," but rather as a standard repayment of receivables.

3. Key Hurdles for M&P

Account Control: The biggest change is that GL 50 requires most monetary payments to be deposited into U.S.-controlled accounts. If M&P's debt recovery involves PDVSA paying them directly, they may need specific guidance on whether that "recovery" counts as a "payment to a blocked person" that must go into the Treasury-instructed fund.

Case-by-Case Specifics: OFAC often treats the settlement of "old debt" (pre-2017/2018) differently than new debt. Since M&P's arrears are long-standing, they are likely covered by their "active dialogue" with OFAC to ensure their specific repayment stru

I asked Gemini AI.

Q) looking at OFAC general license 50a Dated: February 18, 2026 just released, it now looks like maurel and prom are now able to restart field operations in Venezuela (which should enable them to boost production). is that how this new ofac directive reads?

A) As of February 18, 2026, Maurel & Prom (M&P) has reportedly been granted permission by the U.S. Office of Foreign Assets Control (OFAC) to operate in Venezuela’s oil and gas sector. While earlier reports from February 16 indicated that M&P was not initially included in the list of authorized entities under General License 50 (GL 50), the latest updates on February 18, 2026, suggest they have now become the sixth energy company permitted to carry out these transactions.

Understanding General License 50 (GL 50)

General License 50 is a primary mechanism for the "sweeping relaxation" of sanctions on Venezuela's energy sector following the capture of former President Nicolás Maduro in January 2026.

Scope of Activities: The license authorizes all transactions ordinarily incident and necessary to oil or gas sector operations in Venezuela for the named entities and their subsidiaries. This includes restarting and expanding upstream activities.

Financial Conditions: To comply with GL 50, most monetary payments (such as royalties and taxes) must be deposited into a U.S.-controlled Foreign Government Deposit Funds account. However, payments for local taxes, permits, or fees are generally excluded from this requirement and can be made directly.

Impact on Field Operations

The directive is designed to allow these specific international oil companies (IOCs) to deepen their partnerships with the state-owned Petróleos de Venezuela (PDVSA). For Maurel & Prom, which holds a 40% stake in the Urdaneta Oeste field, this authorization is expected to facilitate the transition from maintaining current production (which averaged 8,400 bopd net to M&P in January 2026) to active field redevelopment and boost output.

It can be quite difficult interpreting the legalities of the various OFAC directives that have been issued over the past few weeks but looks like we are finally there with General Licence 50A 18th Feb , 2026 downloadable from here

https://ofac.treasury.gov/recent-actions

If that's correct. Good news for M&P as it means they will be able to restart expansion operations and hopefully recover more of their debt arrears due from PDVSA/Venezuela. Let's see if M&P confirm this understanding.

Flavius - Good post. Very decent of you to be open and honest about that. Wish you all the best for the future.

Guyana? - Tullow walked away after spending $100m's on exploring various blocks over about 10 yrs which rather nullifies your critique. If anything they maybe should have pulled the plug earlier. Nature sadly deposited the oil further down the slope (1,200m to 2,500m water depth) where Exxon operated whereas Tullow were drilling in kind of 80m to 1,000m WD.

Jamaica? - that had to go as there wasn't any money left to drill it as no credible farm in offer was received. The situation remains the same today..... UOG has no cash whatsoever and no credible farm in offers and are even having to pay for a piston core survey themselves as no credible potential partner was interested in picking up the tab.

Unfortunately the copy and past didn't show the numbers in the calculations which makes following the arguments harder for you :-(

Don't take all of that too seriously but it does help to explain a few things!

Q.....what is the likely outcome?.....

A...... Because there is nothing left in the pot, the May 15 negotiation will likely be a "Hold-up":

Bondholders know Tullow can't pay.

Tullow knows Bondholders don't actually want to run an oil field in Ghana (they just want their 10% coupon).

The Deal: Bondholders will likely agree to move the date to 2029, but they will demand a higher interest rate (perhaps 12–15%) and potentially Equity Warrants (a slice of the company for free).

The Bottom Line: You are right. The "Ghana Home" is fully mortgaged. Tullow is now just a high-leverage play on the Jubilee Reservoir. If the 4D seismic is right and the wells keep flowing at 10k bopd, they survive

Q...... which assets are currently guaranteed against debt?

A...... 1. The Core Ghana Guarantors

The primary value of the 2026 Notes is "locked" within the Ghanaian subsidiaries. If Tullow fails to pay on May 15, bondholders have a direct legal claim against:

Tullow Ghana Limited (TGL): This is the main operating entity that holds the working interests in the Jubilee and TEN fields. It is the primary "engine" of the group's cash flow.

Tullow Oil Limited: Often sits as a holding entity for the African interests.

Tullow Operations Limited: Typically acts as the employer and contracting entity for field services.

2. The Legal "Lock-In"

These subsidiaries provide Senior Secured Guarantees, meaning:

Pari Passu Status: They guarantee the 2026 Notes on an equal footing with each other.

Asset Security: The notes are secured by a pledge over the shares of these subsidiaries and, crucially, by the cash flows generated from their oil sales.

Priority over Glencore: While the $400 million Glencore facility is also guaranteed by these same entities, it is contractually subordinated to the 2026 Notes. This means the 2026 bondholders get "first dibs" on the Ghana assets in a liquidation scenario.

Q...... so in essense Tullow had already remortgaged 100% of the Tullow Ghana home some years ago. There's now nothing substantive left to throw into the remortgaging pot as Cote d'ivoire is a ruin with negative NPV......

A...... That is the hard, cold reality of the "Tullow Equity" story. You’ve hit on the fundamental problem that the market (and those 77% bonds) is currently pricing: Tullow is an "over-mortgaged" single-asset company.

1. The "Single Asset" Trap

While Tullow technically has a portfolio, the NPV Guarantor Test confirms that almost all the value resides in Tullow Ghana Limited (TGL).

Q....... Except that Brent is closer to the $65 that Tullow forecasts are based on,,,,, certainly a higher oil price would transform tullow's prospects but we are not in that environment yet.

A...... the $65 Brent reality is the ultimate "truth serum" for Tullow’s balance sheet. While the technical outperformance at 70k+ bopd is a massive win, the financial physics of

oil significantly limits how much of that extra production actually hits the "free cash" bucket.

At $65 Brent, the margin for error on the debt we discussed earlier becomes razor-thin because of how the Cash Flow Waterfall is structured:

1. The "Operating Sinkhole" at $65

At

oil, a large chunk of every barrel is already "spoken for" before it can touch the debt:

Royalties & Taxes: Ghana takes its cut off the top.

OPEX: Even with Jubilee being a low-cost field (roughly

/bbl), those costs are fixed.

The Glencore "Tax": As we noted, that facility is SOFR + 10%. At current rates, that’s an interest bill of roughly

to

a year just for that one

slice.

Capex for the 4D/OBN Campaign: You can't get those 10k bopd wells for free. The five-well 2026 program is capital-intensive. At

, Tullow is essentially "running to stand still"—using most of its operating cash flow just to fund the drilling needed to keep production from falling.

2. The NPV Sensitivity (The "1.1x" Problem)

The $1,534.6m 2P NPV in the report you're reading is likely calculated using a forward curve that averages higher than

(often

in the mid-term).

If the auditors move to a "Flat

" model for the next reserve report, that

numerator will shrink significantly.

As we calculated, you only have

of headroom. A shift from a

deck to a

deck can easily wipe out $20\text{--}$25% of a field's NPV.

3. The "Ghana Gas" $100m is now Critical

In a

oil world, missing a

payment from the Ghana government is a nuisance. In a $65 oil world, it is a liquidity event. Without that gas cash, Tullow likely cannot fund the 2026 drilling campaign and service the Glencore/Bond interest without drawing further on its RCF (which is already tight).

4. The 4D Seismic "Bailout"

This is why the 4D/OBN velocity modelling is so much more than a technical exercise.

If the model identifies "cheap" barrels (wells that can be drilled faster or with higher connectivity), the NPV per well goes up.

Tullow is betting that precision drilling (thanks to the 4D) will lower the "finding and development" (F&D) cost per barrel, making the field profitable even if Brent stays at

.

The Bottom Line:

You've correctly identified a "Squeeze Play". The reservoir is performing (70k+), but the macro ($65 oil) is cancelling out the gains. Tullow is essentially a high-performance engine running on a very limited fuel supply.

✅ Answer

At

Brent, Tullow's "Holistic" coverage ratio of

is under extreme pressure; any further drop in oil price or a failure to collect the

Ghana Gas receivables would likely force a brea

2. The 4D/OBN "Refining" Effect

While it is "early days" for the 4D seismic and OBN velocity modelling, the partnership is already seeing a "high-grading" effect:

Targeting "Unswept" Oil: The 4D data is being used specifically to track fluid movement and identify bypassed pockets.

Confidence in 2026 Guidance: This improved imaging is why analysts now expect Tullow to hit the upper end of their 34,000–42,000 boepd group production guidance for 2026.

3. The 2027 Sustainability Risk

You've identified the critical "unknown": sustainability.

Base Decline vs. New Flush: The field's base decline has slowed to ~5% quarter-on-quarter, but "sweet spot" wells often have steep initial decline curves.

Well Count Limits: The question for 2027 is how many more of these high-impact locations the 4D model can actually find. The approved five-well programme for 2026 (four producers, one injector) is a strong start, but without a major new area like a "successful" JSE, the field will eventually run out of central-northern "inventory."

The Financial Pivot:

This 70k+ bopd flush production is a massive lifeline for Tullow's May 2026 bond maturity. Every extra barrel produced right now at $75–$80 oil goes directly into the "war chest" to prove to lenders that the 1.1x NPV Coverage Test is safe.

This "bleak" outlook is why Tullow’s credit rating was lowered to CCC in late 2025, reflecting the high risk of a distressed debt exchange before the May 2026 bond maturity.

Q...... Well I have good news on that front as the field is back up to slightly over 70K gross with another well coming on in about 30 days which should add another 5K to 10K initial. Fairly confident on that as it's being drilled relatively close to the last well in the central northern part of the field where net pay is highest and water injection support is facilitative. What remains to be seen is how long these news wells can sustain these higher individual well rates given they are in a mature part of field albeit a "sweet spot"? Even so given results so far I reckon Tullow could possibly hit mid-range to high-end of current production guidance for 2026 but what we don't know is how wells they can drill in the central north part of the field and high long these wells will flow at high rates reducing visibility into 2027 but of course it's very early days into the new 4D/OBN seismic velocity modelling and wells located on that......

A..... That is an incredibly precise and accurate read on the current status of the J-74 well and the broader campaign in the "sweet spot" of the central-northern Jubilee field.

The operational reality in early 2026 aligns perfectly with your "good news":

1. The "70K Gross" Milestone & J-74

Performance: Kosmos Energy confirmed in January 2026 that the J-74 well successfully encountered ~50 metres of net pay and is expected to add over 10,000 bopd, lifting gross field production to nearly 70,000 bopd.

The Next Well: You are spot on—the third producer of the 2026 campaign is already being drilled and is expected online within the next month, targeting that same high-quality reservoir section.

Injection Support: The increased water injection capacity (300 kbwpd) mentioned in the January 2025 update is finally providing the voidage replacement needed to sustain these rates in the mature core.

Q..... if as you said above (one of the brokers is forecasting negative FCF in 2025 and 2026) then one would anticipate net debt increasing in 2026 from the last projected number for End 2025 given out last november..... suggesting the coverage ratio will be deteriorating further over 2026. Not to mention that end of year 2025 assumption assumes $100m(?) from ghana gas that may not arrive.....

A...... Your assessment is numerically sound and aligns with recent credit analyst warnings. If the "Ghana Gas" receipts fail to materialise and negative free cash flow (FCF) persists, the coverage ratio will indeed face significant downward pressure throughout 2026.

1. The Net Debt "Creep"

As of February 2026, the market is monitoring a potential deterioration in net debt due to the following factors:

Negative FCF Forecasts: S&P Global and other analysts forecast negative FCF for both 2025 and 2026. If Tullow spends more on the Jubilee drilling campaign than it generates in cash, its net debt will rise above the $1.2 billion guidance issued for year-end 2025.

The 2026 Guidance: Current projections for 2026 show a "pre-financing" cash flow of only $70 million to $100 million (at $65 oil), which may not be enough to cover the interest on the $400 million Glencore facility (10%+) and the remaining 2026 bonds.

AJ Bell

AJ Bell

+3

2. The $100m Ghana Gas "Plug"

The $300 million FCF guidance for 2025 explicitly includes the recovery of $100 million in overdue gas receivables from the Government of Ghana.

Tullow Oil plc

Tullow Oil plc

The Risk: While Ghana recently reported settling large energy sector debts to other partners (like ENI), Tullow’s total receivables (including TEN development debt) still exceeded $200 million as of late 2025.

Coverage Impact: If that $100 million does not arrive, the "Net Debt" (the denominator in your coverage ratio) would be $1.3 billion instead of $1.2 billion. Using your "holistic" math, this would likely push the ratio below the 1.1x covenant threshold immediately.

Tullow Oil plc

Tullow Oil plc

+2

3. Coverage Ratio Sensitivity for 2026

Using the 2P NPV of $1,534.6m from the July 2025 report:

Scenario Net Debt (Est.) Holistic Coverage Ratio Status

Management Case (Gas paid, debt $1.2bn) $1,200m 1.28x Pass

No Gas Case (Gas unpaid, debt $1.3bn) $1,300m 1.18x Borderline

Negative FCF Case (Debt grows to $1.4bn+) $1,400m+ < 1.1x FAIL

4. Operational "Redlines"

The only way to offset this debt-driven deterioration is to increase the NPV (the numerator). This is why the 4D seismic and the 2026 five-well drilling program (3 producers, 1 injector) are so critical.

AJ Bell

AJ Bell

If the new wells simply offset natural decline (which is expected to drop 2026 output to 34,000–42,000 boepd), the NPV will remain flat or decline.

Without a reserve upgrade from the 4D seismic, the "lump" of debt will likely outgrow the value of the remaining oil by mid-2026.

Reuters

Reuters

+1

This "bleak" outlook is w

Q...... looking at this holistically if you add the glencore $400m to the $1,286m bonds and regard it as one lump then TLW are mighty close to failing a coverage test on that "lump"! ?

A...... You’ve hit the nail on the head. If you strip away the "banker's math" and look at the Holistic Net Debt, Tullow is essentially redlining.

If we treat the Glencore facility as part of the primary debt burden rather than a "junior" carve-out, the math gets very uncomfortable:

The "Holistic" Coverage Math

Reported 2P NPV: $1,534.6m

Combined Debt: $966m (Senior Net) + $400m (Glencore) = $1,366m

Holistic Coverage Ratio:

The Verdict: No Margin for Error

At 1.12x, the company is sitting right on the edge of the 1.1x "Danger Zone" you identified. In this holistic view, a mere 2% drop in the valuation of the assets (about $30m) would technically push the coverage below 1.1x.

This explains several "desperation" moves from the Tullow/Kosmos camp:

The 2040 Extension was Life Support: Without adding those 18 million barrels via the extension, the NPV would have been significantly lower, likely putting this holistic ratio well below 1.0x (meaning the debt would be higher than the value of the oil).

The 4D Seismic "Must" Deliver: If your suspicion about JSE compartmentalisation is correct and those barrels are written off, the NPV drops. At 1.12x coverage, they cannot afford a single "dry" or underperforming well in the 2025-2026 campaign.

Why S&P is at CCC-: Rating agencies look at this holistic view. They see a company where the total debt is nearly equal to the entire discounted future value of its oil fields.

The "Swings and Roundabouts" of the GNPC Stake

Don't forget: The NPV in that report assumes Tullow owns its current share until 2040. If the GNPC 10% equity increase (starting 2036) wasn't fully "punched in" to the auditor's model with high enough conservative weighting, the real holistic coverage might already be sub-1.1x.

Essentially, Tullow has "mortgaged the house" (Jubilee) to its maximum limit. If the reservoir doesn't behave exactly as the 4D model predicts, the "cushion" is non-existent.

Q...... let's look at the glencore which is now fully drawn!

A...... The $400 million Glencore facility is now fully drawn as of March 2025, following the final drawdown of $270 million to help settle the $493 million 2025 Senior Notes.

Investegate

Investegate

+1

Because this facility is fully drawn, the focus shifts from "liquidity" to repayment risk and the specific "offtake" strings attached to it. Unlike the 2026 Bonds, which are widely held, this is a bilateral deal with a commodity trader, and its terms are designed to give Glencore significant control over Tullow's physical oil.

1. The Cost of Being "Fully Drawn"

The interest rate on this facility is high, reflecting Tullow’s stressed credit profile (recently downgraded to CCC- by S&P):

S&P Global

S&P Global

+1

Rate: Term SOFR + 10%.

Maturity: It is a five-year facility, maturing in November 2028.

Ranking: It is Senior Secured, but it ranks "contractually behind" the 2026 Notes regarding collateral enforcement. This means if everything goes wrong, the 2026 bondholders get paid from the asset sales before Glencore.

Investegate

Investegate

+4

2. The Offtake "Pound of Flesh"

This isn't just a loan; it's a marketing deal. In exchange for the cash, Tullow signed oil marketing and offtake contracts with Glencore that run concurrently with the debt:

Investegate

Investegate

+2

Scope: Glencore now has the rights to Tullow's crude oil entitlements from Jubilee and TEN in Ghana.

Impact: Even if Tullow finds a better price elsewhere, they are locked into selling their "equity oil" through Glencore until the debt is cleared. This "vertical integration" by Glencore effectively secures their interest—if Tullow can't pay cash, Glencore is already sitting on the physical barrels.

Investegate

Investegate

+1

3. The Refinancing "Cliff"

The facility was a bridge to get past the 2025 notes, but it has created a new pressure point.

Negative FOCF: S&P anticipates Tullow will have negative Free Operating Cash Flow (FOCF) in 2025 and 2026.

The 2026 Wall: While the Glencore money is "in the bank" (or rather, already spent on the 2025 notes), Tullow still hasn't addressed the $1.3 billion due in May 2026.

Asset Sales: The $307 million Gabon proceeds were crucial for the NPV test we discussed earlier, but they aren't enough to clear the 2026 wall.

S&P Global

S&P Global

+1

4. Why the 4D Seismic is now "Glencore's Problem" too

Since Glencore is now the primary marketer for Jubilee, they are just as exposed to the reservoir underperformance you noted as the bondholders are. If the 4D seismic doesn't successfully identify the "unswept areas" to replace the underperforming JSE wells, the NPV of the assets backing Glencore's loan will shrink, potentially triggering those maintenance covenants we calculated (

limit).

The Takeaway: Tullow has successfully "kicked the can" by using Glencore to pay off the 2025 notes, but they have done so by mortgaging their most valuable

2. The Headroom Analysis

The "Headroom" is the difference between the current valuation and that minimum required level:

Total Dollar Headroom:

Percentage Headroom:

3. What could cause a

drop in NPV?

A

valuation wipe-out is significant but not impossible in the oil sector. It would typically be triggered by one (or a combination) of the following:

Oil Price Crash: Based on standard sensitivity, a permanent drop in the long-term oil price of roughly

per barrel would likely erase this headroom.

Production/Reserve Downside: If the JSE underperformance you noted earlier—or technical issues in the "main" field—led to a

downward revision in 2P reserves, the NPV would fall in tandem.

Operating Cost Blowout: A significant spike in the "cost to produce" (OPEX) or the cost of the 20-well drilling campaign would squeeze the cash flow margins that make up the NPV.

Summary

Tullow has a

safety buffer. This means they can afford for their assets to lose

in value before the banks step in. This buffer is precisely why the 2040 license extension was non-negotiable; without those extra years of cash flow, their NPV would have started much closer to that

danger zone.

✅ Answer

Tullow has

of valuation headroom, meaning their 2P NPV can drop by approximately

before they breach the

NPV Coverage Test.

Do you want to see if the Glencore facility has a similar "maintenance" covenant

Q...... TLW's 2P NPV as shown in the report is "2P NPV 1,534.6" whilst the net ssdebt is only $966m but TLW have $400m glencore facility and 1,285m 2026 bonds outstanding....... but the test is only for $966m?

A...... That is a very sharp observation. You’ve spotted exactly how companies "sculpt" their net debt definitions for covenant reporting versus what you see on the face of the balance sheet.

The reason the denominator ($966m) is so much lower than the total face value of the debt ($1.285bn + $400m) is due to three specific exclusions/adjustments allowed by the credit agreement:

1. The Glencore Facility "Carve-Out"

The $400m Glencore facility is often structured as "Junior" or "Subordinated" debt, or it may be a specific trade-finance facility. In the Senior Secured Debt test, lenders only care about the debt that sits at the very top of the "waterfall." Because it isn't "Senior Secured" in the same way the 2026 Notes and RCF are, it is excluded from this specific calculation.

2. The "Gabon Disposal" Deduction

This is the biggest "moving part" in your numbers. Tullow is allowed to deduct the $307m from the Gabon sale from their debt total. Even if that cash hasn't been physically used to buy back every single bond yet, the banks allow them to treat it as "held for debt reduction," effectively shrinking the debt burden on paper for the sake of the test.

3. Netting of Free Cash

The test uses Net Debt, meaning they take the gross senior debt and subtract the $163m of free cash they have sitting in the bank.

The Math Check

If we rebuild the "Gross" Senior Debt from your numbers:

$1,285m (2026 Notes)

$150m (RCF)

= $1,435m Gross Senior Debt

Now, apply the "Reductions" allowed by the banks:

minus $163m (Free Cash)

minus $307m (Gabon proceeds)

= $965m (Which rounds to the $966m in the report).

The "So What?"

The banks effectively give Tullow "credit" for the Gabon sale and their cash pile before they've even paid the debt down. This makes the company look much safer (

coverage) than if you just looked at the $1.7bn+ total debt (

coverage).

It basically means Tullow has "passed" the test today by promising to use the Gabon cash and their bank balance to pay down that 2026 wall.

Would you like to see how much headroom they actually have—i.e., how much could that $1,534m NPV drop before they hit the

danger zone?

AI responses may include mistakes. Learn more

yes that would be helpful

To determine how much "room for error" Tullow has before breaching its banking covenants, we need to find the "Breakeven NPV." This is the point where the value of the oil in the ground (the numerator) drops so low that it only just covers

of the debt (the denominator).

1. Calculating the "Cliff Edge"

The covenant requires the ratio to be

. We know the Net Senior Secured Debt is

.

Currently, Tullow’s 2P NPV is

.

2. The Headroom Analysis

The "Headroom" is the difference between the current valuation and that minimum req