S&P removes Tullow Oil from CreditWatch, but keeps negative outlook

Standard&Poor´s took Tullow Oil´s debt off its list of corporate debt instruments which were facing an immediate risk of a debt downgrade, but cautioned that the oil explorer was still facing operational risks at its two key projects, in Ghana.

S&P reaffirmed its credit rating on Tullow´s long-term debt at 'B' and removed it from CreditWatch negative.

The decision taken by the ratings agency followed the recent agreements reached by Tullow with its lenders, which had resulted in an improved liquidity position, S&P said.

However, the outlook was kept at 'negative' due to the risk of delays at its TEN project or that issues might arise at its Jubilee field.

Both factors might lead to production levels and operating cash flows materialising below S&P analysts´ base-case projections for 2016-2017, in turn delaying a return to strong positive free operating cash flows and debt reduction from 2017 onward, the rating agency said in a statement.

As of 14:42 BST shares in Tullow Oil were falling by 1.56% to 227.3p.