Tullow Oil Share Discussion Threads

[leoneobull] 31/1/2016 08:56

As i told ya NY BOY - SA to suffer b4 TLW.

Saudi Arabia faces years of tough austerity as the worst oil price crash in the modern history forces the kingdom to make radical cuts to government largesse, the International Monetary Fund has warned.
The world's largest producer of crude oil will need to "transform" its economy away from oil revenues, which make up more than 80pc of the government's wealth, according to Masood Ahmed, head of the Middle East department at the IMF.
There will have to be a major transformation of the Saudi economy. It is necessary and it is going to be difficult
Masood Ahmed, IMF
The Saudi monarchy has already been forced to unveil the largest programme of government austerity in decades as oil prices have collapsed by more than 70pc in 18 months.
"This will have to be part of a multi-year adjustment process," Mr Ahmed told The Telegraph.
He urged the kingdom to reform its generous system of oil subsidies and introduce a host of new taxes, including consumption levies such as VAT.
• Saudis told to prop up currency amid global devaluation war fears
"There will have to be a major transformation of the Saudi economy. It is necessary and it is going to be difficult, but it is a challenge which I think the authorities have clearly laid out", said Mr Ahmed.
17 out of 25 of the developing world's major oil producers defaulted on their debts in the 80s
Oxford Economics
The warning comes as the world's weakest oil producing nations could buckle under the pressure of the price rout.
IMF officials have been in Azerbaijan this week amid fears Baku will need a $4bn international rescue package to stave off a debt default.
During the world's last major oil price crash in 1986, 17 out of 25 of the developing world's major oil producers defaulted on their debts, according to research from Oxford Economics. Debt mountains in producer nations ballooned by 40pc of GDP on average.
"The 1980s precedents are alarming; producers that avoided sovereign defaults were the exception rather than the rule", said Gabriel Sterne, head of global research at Oxford Economics.
Azerbaijan was forced to abandon its foreign exchange peg with the dollar in December, after speculators caused the currency to crash.
The Saudis have been burning through their reserves at a record pace to protect the riyal's fixed value against a soaring dollar, and should continue to preserve the peg at all costs, said the IMF.
Mr Ahmed said it was "neither necessary nor appropriate" for Riyadh to move to a floating exchange rate, forcing it to undertake record levels of expenditure cuts instead.
"The currency peg has served Saudi Arabia well. It's appropriate for the structure of the economy", he said.
His comments echo concern that any moves to jettison a stable currency, or embark on massive fiscal austerity, could erode the social fabric of the Gulf oil producing nations five years on from the Arab Spring.
Saudi Arabia is set to slash subsidies on water and electricity, and must begin to overhaul its generous fuel subsidies for its 30 million people, recommended the Fund.
"Energy price reform is key. It has been part of the social contract but that will now need to change", added Mr Ahmed.
IMF calculations suggests Saudi Arabia could be running a deficit of around $140bn (£94bn), far above the government's own estimates of around $98bn, or 15pc of GDP.
But the kindgom's relatively large fiscal buffers mean it remains one of the best placed producers to withstand an oil price rout which has been largely driven by its own policy to ramp up supply to punish higher-cost producers such as US shale.
"Commodity slumps are a prolific cause of sovereign distress", said Mr Stern. "Things could work out very badly this time round if commodity weakness persists."

[volsung] 30/1/2016 21:42

Jovi if tlw are 220p next week I would be a buyer probably from 185p

[keya5000] 30/1/2016 21:05

I would not be at all surprised to see brent approaching $40 next week.

[holmess] 30/1/2016 20:40

Fascinating article keya500

[keya5000] 30/1/2016 20:02

Revising the Past – US Oil Production Data

JANUARY 30, 2016 BY STEVE BROWN IN OPINION
As I have said before the US Energy Information Agency (the EIA) has a thankless task, compiling data from thousands of oilfields and operators to come up with an estimate of how much oil the USA actually produces. Some data is timely and accurate, Alaska is a case in point, some, not so much.

So every month as well as giving us a new estimate for the month just passed, we get revisions of the historic data. It is instructive to take a look at that data to see how far off the early estimates were. Big revisions are a sign of a dislocation in the system, a sign that the old rules of thumb aren't working any more. The EIA has suffered from this phenomenon on the way up, as US shale output outstripped any reasonable estimates of how it might perform; and now on the way down, as somehow the whole US oil industry did a passable impersonation of Wile E. Coyote, well beyond the edge of the cliff but somehow defying gravity.

[leoneobull] 30/1/2016 19:37

Interesting what prices one can already get for forward dated sweet light

[holmess] 30/1/2016 17:05

purple11 - so he keeps saying, but the continued speculation that something is happening behind closed doors is going to drive up the PoO - we'll see when the oil futures open............

[purple11] 30/1/2016 16:05

Russia's Novak: No Confirmed OPEC, Non-OPEC Meeting

[jovi1] 30/1/2016 15:58

Volsung
If Tlw go and stay let say 220 on Wednesday would that be a buy or a sell?
It is true is early days and there is no deal on the table as yet, but one thing you can be confident that production will reduce on the shale industry and few more.
Shake had a massive bust with cheep money at less than4% rate for many years now that rate are getting closer to 10 than zero most company will consider
Reducing debit
Pay dividends
Merger
And only then increasing production this will take few years at least

[flyposter] 30/1/2016 15:09

Cheers for the link Holmess, on my phone.

[keya5000] 30/1/2016 15:00

$40 Brent Monday.

[leoneobull] 30/1/2016 13:21

tlw stress tested on balance sheet down to 25 us. Profitable at 40 us and hedged 64% post tax for 2016 at 75 us. £4 by q3?

[leoneobull] 30/1/2016 13:16

Is it this one? http://www.thetimes.co.uk/tto/business/industries/naturalresources/article4678224.ece

[nicebut] 30/1/2016 12:08

Good article in the Times about some oilers and Tallow in particular. Can`t copy -sorry.

[volsung] 30/1/2016 09:50

Milliecusto? Never heard of you. Holmess you may be right. I have no position now but I've seen false dawns before. If it can hold above 180p for a day or two I'll be back.

[keya5000] 30/1/2016 09:14

Blog comment from that article below is very good.


Ukrainian Cobra 13 hours ago
The correlation between production and rig count has at minimum 12 months of lag time. This current flat period of production reflects the transition between growth and contraction.
I have personally been involved with the drilling side of many shale fields across NA. I have drilled wells in the Permian, Marcellus, Bakken, along with Durverney and Montney in Canada. The Common theme across the globe is extremely productive IPO (initial production output) followed by a rapid depletion rate. The best shale wells I have been involved with still have a 60-40% depletion rate between 8-18 months of IPO. After 24 months many of these wells are no longer worth maintaining.
These "Innovations" that are supposedly taking place to make drilling more efficient are completely overblown. Pad drilling, multi-leg horizontals, extra frack sand/ft are all tried and tested methods that have been ongoing the past decade. 500 rigs will not, and can not maintain current production levels.
Look at the rig count and project production 12-18 months ahead of the curve if you want an idea of where production is headed.

[holmess] 30/1/2016 08:57

diku - good article. I'll keep loading up!

volsung - downtrend is broken, and with TLW as well. Hopefully we can retest the breakout and then move forward.

[dlku] 30/1/2016 07:58

hxxp://www.barrons.com/articles/higher-oil-prices-ahead-1454103073

calls for US$50 bucks oil
If Russia cut in summer we could see TLW at 340p

[volsung] 30/1/2016 07:57

Oil is still in a downtrend. Nothing has changed. There is no OPEC agreement. Iran is online. Every now and then poo jumps to the upper bollinger and then falls back again. Unless the Saudis decide to curtail production oil will be back in the mid twenties again soon.

[keya5000] 30/1/2016 07:49

TLW was in a downtrend when poo was much higher.


Seriously it was in a down trend when the price of oil was falling from 100$ to 27$.

Strange that and now things appear to be reversing the opposite is occurring.

Even stranger.
Lol. M

[volsung] 30/1/2016 07:43

Be interesting to see what happens next week. TLW was in a downtrend when poo was much higher and the markets were really bullish. A higher poo will only increase the oil glut as shale comes back into play again. That said TLW is a nice trading share. 10 bagger I think not.