For 18 months, one topic has dominated questions from Tullow Oil’s investors: debt. By the end of 2016, the Africa-focused explorer and producer was sitting on a whopping $4.8 billion pile of debt, the combined effect of the oil price slump and the costs of investment in its Ten field off the coast of Ghana. That gave the company an uncomfortably high gearing of more than five times earnings before exploration expenses, a key measure for oil explorers.
Things are improving, however. Higher oil prices, increased production and a rights issue helped to bring net debt down to $3.5 billion by the end of last year, reducing the gearing to a smidgen higher than Tullow’s target of 2.5 times. By the end of March it