Tullow Mulls Refinancing With Cheaper Debt After Oil Price Boost

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Or sign-in if you have an account.(Bloomberg) — Tullow Oil Plc is exploring a refinancing of debt it reworked earlier this year as improving fundamentals open the door to lower borrowing costs, according to people familiar with the matter.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountAny refinancing is more likely in 2027 provided Tullow continues to strengthen its balance sheet and operating performance, some of the people said, asking not to be identified discussing a private matter.Tullow declined to comment in an emailed response to questions.The Africa-focused oil and gas producer said in a June trading update that it expects to generate “significant” free cash flow this year and realized a record $130 a barrel for an April crude cargo. Shares of independent oil producers including Tullow and Kosmos Energy Ltd. have more than doubled this year as oil prices climbed on supply disruptions linked to the Iran conflict. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againA refinancing is Tullow’s preferred method of dealing with its large and expensive debt load, but the management is also exploring a sale of the business or its assets, the people said, for which it has established a committee to oversee the process.Tullow spent months negotiating with creditors before completing a debt overhaul in April. The deal extended the maturity of about $1.2 billion of bonds and revised their payment terms. Tullow also replaced a $400 million loan from commodities trader Glencore Plc with $423 million of notes and secured a new cargo prepayment facility.The company, which had borrowed heavily to develop oil fields that were slower than expected to come online, faced a $1.3 billion bond maturity in May and declining production, closing it off to a standard refinancing.Since then, Tullow’s changing fortunes have triggered a rally in its debt, with bonds issued in April’s revamp trading above their face value, near 102 cents on the dollar, according to pricing compiled by Bloomberg. The bonds and cargo prepayment facility include a springing maturity clause that accelerates repayment by six months unless the company has signed a sale and purchase agreement by Sept. 30, 2027.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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