Tullow Oil Share Discussion Threads

[ibug] 18/8/2016 08:16

Nice rise this morning --- and it has much further to run especially with oil @ almost $50 USD/ barrel.....this stock is now derisked as it is eligible for a proportion of a 15% repayment of carry costs from the Ghana government.


COME ON 285p...SOOOOON imo.

[frontdoor bull] 18/8/2016 08:10

YAHHOOOOOOOOOOOOOOOOOOOo

[hazl] 18/8/2016 08:09

Excellent indeed well done ibug and of course TLW.

[ibug] 18/8/2016 08:07

As predicted news....excellent.

[kevjones2] 18/8/2016 00:02

As I have repeatedly stated earlier today, there MIGHT be an RNS in the morning but only because Tullow chose to issue one not because some poster inferred something from what an investment bank hinted. Indeed, I hope there is one and that's it a very good one but all is fine if there isn't.

[ibug] 17/8/2016 22:51

Once the shorters clear off this stock should perform a lot better...that will happen when the markets realise the business has effectively derisked.


WATCH OUT FOR NEWS TOMORROW...if it arrives about the TEN project then perhaps we might party.

[ibug] 17/8/2016 22:49

The following is some independent analysis:

Operating performance:

The TEN Project, located off the Ghanaian coast, is on schedule to deliver first oil in early August and is expected to increase group net production by c. 60% when it reaches facility capacity around the end of 2016. This is expected to allow the group to begin deleveraging organically.

New operating procedures at Jubilee, following the FPSO Turret fault, are working well with H216 production expected to average 85,000 bopd. Meanwhile the process of spread mooring the FPSO to provide a long term solution has begun. Tullow is insured against both the capital costs of the damage and lost production and revenue.

Progress continues with the upstream and pipeline projects in Kenya and Uganda. The Kenya appraisal programme underpins an estimated recoverable resource of 750mmbo with exploration and appraisals in the South Lokichar Basin to restart in Q4. The Kenya Early Oil Pilot Scheme is currently being assessed by the Kenyan government and offers a potential 2,000 bopd by the second half of 2017.

Our view:

Tullow cannot control the oil price, and it has been desperately unlucky. Having found vast quantities of oil it then saw the rug pulled from under its feet when the price of crude plunged, just as the company was fully committed to taking on huge debts in order to develop the new fields.

Crucially, Tullow's lenders have kept the faith, renewing and extending debt facilities through thick and thin, allowing Tullow to focus on developing its discoveries. The problem with the Jubilee production vessel's turret is a distraction, but shows the importance of being well insured, for without it, Tullow could have been dealt a body blow.

With most of the capital expenditure behind it and costs falling, Tullow is finally starting to see rising production. By the end of 2016 TEN is expected to be producing 80,000 bopd, worth around $3.6m a day to revenues at current oil prices, after which the group will be hoping for further growth in production from the East African discoveries and a recovery at Jubilee.

However, the balance sheet looms large for Tullow, with debt rising rapidly over the last few years. The company suggests that the combination of TEN coming online and falling operating and capital expenditure means it will be able to begin organic deleveraging (using cash flow to pay down the debt mountain rather than seeking to raise new equity). Unfortunately Tullow's cash flow is largely dependent on the oil price, so debt repayment depends on conditions not deteriorating further.

The company deserves credit for their ongoing exploration success and their development achievements. But the value of it all is out of their hands and the stock will remain a play on future oil prices. Investors should also bear in mind that at some point, Tullow may seek to raise additional equity funds to cut debt levels.

All yield figures are variable and not guaranteed.

[wookie77] 17/8/2016 22:48

I think we've topped out in the short term. Oil prices up 10%+ but in the last two days we've ground out a few pennies. I expect we'll see some increased short positions again. Im bullish Tullow but it worries me how badly the share price has performed compared to others and also the number of shorts...

[zingaro] 17/8/2016 20:21

ibug - filtered for verbal diarrhea / repetitiveness.

[ibug] 17/8/2016 20:14

KEV --- I can tell you that I never short shares and I have never said anything about this stock before a month ago.

So stop trying to spread doubt and delusion....yes I am a long term holder as I am with most stocks that I trade....I NEVER SHORT ANYTHING!.

TLW has the possibility of huge leverage against debt holders with rising production on new long term projects unlike firms like PMO whose portfolio consists of many mature projects.

The following is some independent analysis:

Operating performance:

The TEN Project, located off the Ghanaian coast, is on schedule to deliver first oil in early August and is expected to increase group net production by c. 60% when it reaches facility capacity around the end of 2016. This is expected to allow the group to begin deleveraging organically.

New operating procedures at Jubilee, following the FPSO Turret fault, are working well with H216 production expected to average 85,000 bopd. Meanwhile the process of spread mooring the FPSO to provide a long term solution has begun. Tullow is insured against both the capital costs of the damage and lost production and revenue.

Progress continues with the upstream and pipeline projects in Kenya and Uganda. The Kenya appraisal programme underpins an estimated recoverable resource of 750mmbo with exploration and appraisals in the South Lokichar Basin to restart in Q4. The Kenya Early Oil Pilot Scheme is currently being assessed by the Kenyan government and offers a potential 2,000 bopd by the second half of 2017.

Our view:

Tullow cannot control the oil price, and it has been desperately unlucky. Having found vast quantities of oil it then saw the rug pulled from under its feet when the price of crude plunged, just as the company was fully committed to taking on huge debts in order to develop the new fields.

Crucially, Tullow's lenders have kept the faith, renewing and extending debt facilities through thick and thin, allowing Tullow to focus on developing its discoveries. The problem with the Jubilee production vessel's turret is a distraction, but shows the importance of being well insured, for without it, Tullow could have been dealt a body blow.

With most of the capital expenditure behind it and costs falling, Tullow is finally starting to see rising production. By the end of 2016 TEN is expected to be producing 80,000 bopd, worth around $3.6m a day to revenues at current oil prices, after which the group will be hoping for further growth in production from the East African discoveries and a recovery at Jubilee.

However, the balance sheet looms large for Tullow, with debt rising rapidly over the last few years. The company suggests that the combination of TEN coming online and falling operating and capital expenditure means it will be able to begin organic deleveraging (using cash flow to pay down the debt mountain rather than seeking to raise new equity). Unfortunately Tullow's cash flow is largely dependent on the oil price, so debt repayment depends on conditions not deteriorating further.

The company deserves credit for their ongoing exploration success and their development achievements. But the value of it all is out of their hands and the stock will remain a play on future oil prices. Investors should also bear in mind that at some point, Tullow may seek to raise additional equity funds to cut debt levels.

All yield figures are variable and not guaranteed.

[kevjones2] 17/8/2016 18:40

Ibug, you spent days running down Tullow a few months ago. The general consensus at the time was that you were shorting it. Are you a longterm holder now?

[ibug] 17/8/2016 18:09

LOL OIL PRICES ARE RISING THAT EQUATES TO A HIGHER share price IF IT HOLDS BY TOMORROW...hahaha @ shorters.


We might see $50 USD at this rate of climb...lol...currently $49:59 USD.

[kevjones2] 17/8/2016 17:58

Definitely did not work. Lol.

[ibug] 17/8/2016 17:15

Oil prices are rebounding on the inventory shortfall. Looking pretty good for tomorrow if the far east hold the POO at current levels over night...imo.

[kevjones2] 17/8/2016 16:58

Well, looks like that didn't work.

[ibug] 17/8/2016 16:55

Investing.com - Financial Markets Worldwide


Investing.com - Oil prices trimmed overnight losses in North American trade on Wednesday, rising back towards five-week highs after data showed that U.S. crude and gasoline supplies fell last week.

Crude oil for September delivery on the New York Mercantile Exchange dipped 10 cents, or 0.21%, to trade at $46.48 a barrel by 10:40AM ET (14:40GMT) after rallying to $46.73 in the prior session, the most since July 12.

Prices were at around $45.92 prior to the release of the inventory data.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 2.5 million barrels in the week ended August 12. Market analysts' expected a crude-stock gain of 0.5 million barrels, while the American Petroleum Institute late Tuesday reported a supply drop of 1.0 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, declined by 724,000 barrels last week, the EIA said


Total U.S. crude oil inventories stood at 521.1 million barrels as of last week, which the EIA considered to be “historically high levels for this time of year”.

The report also showed that gasoline inventories decreased by 2.7 million barrels, much more than the expected 1.6-million-barrel decline.


Meanwhile, on the ICE Futures Exchange in London, Brent oil for October delivery inched up 11 cents, or 0.22%, to trade at $49.34 a barrel after touching an intraday peak of $49.48, a level not seen since July 7.

Crude prices are up by more than 10% over the past four trading sessions amid indications major oil producers are reconsidering a collective production freeze in a bid to boost the market.

The rally started last Thursday after Saudi Arabia’s energy minister said the country would work with other oil producers to stabilize prices at a meeting in Algeria next month.

Russian Energy Minister Alexander Novak said on Monday his country is opening up to an agreement with other major oil producers to cap output "if necessary" to achieve market stability.

However, market players remained skeptical that the meeting would result in any concrete actions. An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative.

Despite recent gains, indications of an ongoing recovery in U.S. drilling activity combined with elevated stocks of fuel products around the world is expected to keep prices under pressure in the near-term.

[ibug] 17/8/2016 16:42

In the meantime the EIA have just published approx -2.508 million barrel shortfall for US inventories....looks good for oil stocks imo.