Tullow Oil Investors - TLW

Tullow Oil Investors - TLW

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Stock Name Stock Symbol Market Stock Type
Tullow Oil Plc TLW London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.90 2.6% 35.58 16:35:16
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34.86 34.46 35.84 35.58 34.68
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OIL & GAS PRODUCERS

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Posted at 03/2/2023 12:50 by yellowstoneadvisory
Sign up for the Tullow webinar for investors on 20th March at 12pm.

Rahul Dhir, Chief Executive Officer and Richard Miller, Chief Financial Officer will provide an introduction to Tullow Oil and update on company performance following the full year results which will be published in early March

Register

Https://us02web.zoom.us/webinar/register/5216736304499/WN_ABQwbOs5RK6v3OH38KhIAA

Posted at 08/12/2022 21:05 by lyreco1
Another snout in the trough of plenty, what shareholders needs is news on deals not more fat cats feeding from shareholder trough of plenty.

Didn't Rahul mention in one of his fist RNS, s that gas deals in Ghana would not contribute much in the name of profits?

Heard it many tomes, Rahul needs to go as he is doing nothing but turn TLW into another PMO but in a more sneaky way. Everything he does is toxic for the share price and value for investors. IMHO

BUT! The share price performance compared to the mega oil price rises in the past don't lie.

Posted at 19/11/2022 10:48 by florenceorbis
Jamie Ashcroft

08:44 Wed 16 Nov 2022




Tullow Oil says it has delivered on ops and financial targets for 2022

Production being in-line and cuts to some spending plans see Tullow strengthening its balance sheet



Tullow Oil PLC (LSE:TLW) told investors it has delivered on its operating and financial targets in the first 10 months of 2022, as it narrowed guidance for the full year to between 61,000 and 62,000 barrels of oil per day (from 60,000 to 64,000).

“Our producing assets continue to perform well, in line with expectations,” chief executive Rahul Dhir said in a statement.

“We continue to strengthen our balance sheet, with free cash flow guidance for 2022 increased to US$250mln and gearing on track to be less than 1.5 times by the end of the year."

Deferral of certain work programmes see capex and decommission spend reduce to US$360mln and US$80mln for the year, the company noted.

Around half of Tullow’s output comes from the Jubilee field, offshore Ghana, and the company said it intends to add two new production wells at the project before the end of 2022 before a further two are drilled in early 2023 – with all four expected online by the end of H1 2023.

A new well at the TEN field, also offshore Ghana, was brought onstream in 2022 though the results disappointed and the production data continues to be evaluated to optimise future plans.

In Kenya, the company is currently seeking an extension for the review of a field development plan as it seeks to bring in an additional strategic partner.

Some 17,000 boepd of production comes from Tullow’s non-operated portfolio, which is impacted presently by planned downtime for a floating production vessel at the Espoir field, offshore Côte d'Ivoire, for remediation work.

Proactive

Posted at 10/11/2022 14:36 by bootycall
hTTps://www.tullowoil.com/investors/events/
@xxnjr its the 7th December.

The CC for Kosmos clearly stated that the two strategic wells drilled were attempting to define the aerial extent of potentially “new reserves” not the reserves booked to date. I would not jump to conclusions in advance of the CMD. It might be fair to describe the last two wells as disappointing at those precise locations relative to pre drill expectations…but not to opine on how production will ramp up on for the rest of the acreage. If you look at the drilling history of the TEN field you will see that there is a stratigraphic play. Past wells encountering thin sands have subsequently deviated into sections of up to 600 metres of pay. It is important that Tullow grade prospects according to their return on capital…if Rahul cannot describe his plans coherently after over two and a half years at the helm…he should be sacked as CEO. I think he is good at sweating production assets but,IMO,he is poor at providing proper production guidance to markets. He simply does not have the luxury of sitting back…his failure to communicate has allowed bond investors to misconstrue forward free cash flow resulting in mispriced redemption yields on our debt. We are a sitting target for a takeover. Perception will change completely if they close a proper deal with a Kenya farminee. Booty

Posted at 05/10/2022 12:37 by xxnjr
"Tullow Oil’s failed deal with Capricorn Energy Plc was dragged down by hedge funds taking short positions and “emotional investors” who didn’t properly assess its value, according to its chief executive officer.

After focusing on controlling costs and lowering risk during his first two years leading the Africa-focused company, Tullow CEO Rahul Dhir in June unveiled a tie-up with Capricorn. Those plans were scuppered last week after Capricorn ditched Tullow and announced another deal with NewMed Energy LP.

Capricorn was “aggressive221; in pitching the deal in the spring “and we kind of said ‘ok let’s look at it’ and we saw value,” Dhir said in an interview in Cape Town on Tuesday. After the merger was announced, opposition from Capricorn shareholders grew and became more public.

“You had hedge funds who drove the narrative without any real financial exposure,” the CEO said, adding that some had short positions on Tullow and long positions on Capricorn.

Tullow had agreed to buy Capricorn in an all-stock deal that valued the combined company at roughly £1.5 billion ($1.7 billion). The companies said at the time the transaction would open up opportunities to expand across Africa.

“There were investors who had a very strong negative view on Tullow,” the CEO said, citing one shareholder who criticized the deal as a cultural misfit, despite Dhir previously working at Capricorn in its earlier iteration as Cairn Energy. “I was really struck by the emotion and it was emotion based on history, not on fact.”

Tullow’s business plan remains unchanged and includes finding a strategic partner for its $3.4 billion project in Kenya by the end of the year. The company is mainly concentrating on legacy assets in Ghana, drilling cost-effective wells in an effort to bolster production.

“The great thing for us in the organization has been that people stay focused on the core business,” Dhir said, while maintaining that the deal with Capricorn was still a fair one. “It’s always disappointing when you worked on something that doesn’t happen.”
=======================================================

Interesting. Hadn't realised the initial approach came from CNE. Maybe cos Egypt are effectively bankrupt now which probably means CNE will see delays in receiving cash from Egypt.gov for produced gas.

Posted at 07/9/2022 21:50 by xxnjr
FT Lex:-

"Oil exploration and production companies were once valued more highly for finding hydrocarbons than extracting them. No longer. Tullow’s proposed takeover of UK-listed peer Capricorn has inspired little enthusiasm. Repsol shareholders have meanwhile greeted a $4.8bn E&P stake sale by the Spanish group with studied indifference.

This may seem odd when an energy crisis is raging in Europe and the value of hydrocarbon reserves have theoretically soared. Surely well-financed explorers should be scouring the world for fresh supplies?

Instead, investors are looking past the Ukraine war to the battle with climate change.

Some of Capricorn’s shareholders can think of better uses for net cash of $631mn than funding Tullow’s exploration and its debt repayments. They want a break-up rather than a buyout. At the very least a big capital return would be appreciated.

Both companies trade at very low valuations. On an enterprise value-to-forward ebitda basis, their shares are historically cheap at less than two times, on Bloomberg data. This is despite the heavy emphasis both put on the capital “P” in their E&P moniker, as Jefferies puts it.

Repsol, the big Spanish energy company trades at nearly the same multiple. On Wednesday, it announced that it would sell a quarter of its upstream oil and gas production unit to a US investment group called EIG for $4.8bn.

Repsol optimistically claimed that this put its upstream business on a valuation of $19bn, not far from its $24bn enterprise value. There is plenty of P there given Repsol produces an average of 570,000 barrels of oil equivalent daily, most of which is natural gas. The share price did not budge on the news.

The energy crisis has driven up the prices of oil and gas without greatly improving the outlook for E&Ps. Investors have plenty of doubts about the ESG ethical investment movement. But they have even greater reservations about fossil fuel hunters."

Posted at 23/8/2022 08:27 by adrian j boris
subsurface
23 Aug '22 - 09:13 - 57897 of 57898
0 0 0
Benefits of Capricorn merger 'blindingly obvious', says Tullow CEO



Tullow Oil (TLW) has a new motto that includes the line “every dollar counts”.

This is something it can share with those pushing back against its merger with Capricorn Energy (CNE). The mechanics of the all-share deal are simple: Tullow provides the production assets and growth prospects, while Capricorn provides its estimated net cash position of $800mn (£673mn) at the end of this year, as per investment bank Stifel. Capricorn’s board said the 47/53 split in the new company was the best it could do.

The all-share offer equates to 210p a share for Capricorn, below the recent weeks' trading level of over 230p.

The pushback from the company’s shareholders has been vociferous, however.

The former Cairn Energy is a merger target after its payout from the Indian government for appropriating its former subsidiary Cairn India.

After years of court battles, India paid the company $1bn and it is left with a similar cash position even after paying a dividend of $500mn. At the same time, the company has shifted its focus to former Shell (SHEL) assets in Egypt, and cash profits are set to climb significantly this year and next. But it faces questions over strategy, largely around what to do with the cash and where growth will come from in the future.

Tullow says it answers those questions by supplying the assets and expansion prospects. The plan for the combined company is to hit 120,000 barrels of oil per day (boepd) by 2025 and have an annual dividend minimum of $60mn.

In an interview at Tullow’s West London headquarters last week, its chief executive Rahul Dhir said opposition to the deal came from a lack of understanding of the benefits. “Once people have [more information] they can objectively assess the combined business plan, pay attention to the synergies and recognise the very unique strategic position of the company, then [the rationale] becomes blindingly obvious,” he said. The company will hold a capital markets day in coming months to further lay out the merger plan.

Dhir said Tullow already had a “unique asset base that had been significantly underinvested”, and with further growth within reach if the significant debt servicing needs disappear. He pointed to successes this year in increasing production from offshore assets in Ghana as evidence that existing projects have more to give. First-half net production at the Jubilee field was 31,000boepd, compared with 25,000boepd a year ago.

Those capital constraints come from the company’s massive debt pile. At the end of 2019, debt covenants and disappointing production levels coupled with a weak oil price meant it came close to insolvency. A refinancing in 2021 reduced the risk by pushing out debt maturities and since then the higher oil prices have put it on a sounder footing, but total debt remains significant at $2.5bn, as per a July trading update.

The merger is grinding along – a shareholder vote won’t be until the end of the year, and the prospectus are yet to land.

Dhir put resistance to the deal from Capricorn shareholders down to risk arbitrage, where investors would push for the offer to rise after buying in post-announcement.

But since June, large Capricorn investors have been clear: no deal.

“The simple fact is, we don’t want Tullow paper,” Jamie Sherman, co-chief investment officer at Kite Flag Investment Manager, told Investors' Chronicle. His fund holds 6.7 per cent of Capricorn through cash-settled derivatives. “[Tullow] is high risk and highly-levered,̶1; he added. "This is effectively like a magic bean story, trading our dollars today for the promise of something in the future."

Legal and General Investment Management (LGIM) and Palliser Capital have also come out against the deal. Palliser and Sherman both said investors could simply buy Tullow shares if they wanted exposure, while the Kite Lake co-CIO said the bigger company could simply raise cash through an equity issue if shareholders were happy to see their stakes diluted.

Sherman said Capricorn should launch a strategic review to gauge third-party buyer interest, and if that does not bear fruit, then "return the bulk of the cash to shareholders" from both the India award and 2023 contingent payments from North Sea and Senegal divestments, while focusing operationally on the Egyptian assets it bought last year.

Tullow has an easier threshold to pass with the shareholder vote, with a simple majority, while Capricorn needs 75 per cent support to get the deal through. When the merger was announced, Capricorn chief executive Simon Thompson said it would “allow the two companies to accelerate investment in new opportunities across the continent, while retaining a resilient balance sheet and delivering attractive returns to shareholders”.

Stifel analyst Chris Wheaton, another sceptic, puts Capricorn’s net asset value (NAV) at 271p a share. He increased this in June based on contingency payments Capricorn will likely receive for the Senegal asset(s) it sold to Woodside Energy (WDS) in 2019.

Other analysts, covering Tullow, see the deal more favourably. The combination “makes sense strategically for the combined scale it brings in this production-led E&P era”, said Mark Wilson at investment bank Jefferies.

Posted at 23/8/2022 08:13 by subsurface
Benefits of Capricorn merger 'blindingly obvious', says Tullow CEO



Tullow Oil (TLW) has a new motto that includes the line “every dollar counts”.

This is something it can share with those pushing back against its merger with Capricorn Energy (CNE). The mechanics of the all-share deal are simple: Tullow provides the production assets and growth prospects, while Capricorn provides its estimated net cash position of $800mn (£673mn) at the end of this year, as per investment bank Stifel. Capricorn’s board said the 47/53 split in the new company was the best it could do.

The all-share offer equates to 210p a share for Capricorn, below the recent weeks' trading level of over 230p.

The pushback from the company’s shareholders has been vociferous, however.

The former Cairn Energy is a merger target after its payout from the Indian government for appropriating its former subsidiary Cairn India.

After years of court battles, India paid the company $1bn and it is left with a similar cash position even after paying a dividend of $500mn. At the same time, the company has shifted its focus to former Shell (SHEL) assets in Egypt, and cash profits are set to climb significantly this year and next. But it faces questions over strategy, largely around what to do with the cash and where growth will come from in the future.

Tullow says it answers those questions by supplying the assets and expansion prospects. The plan for the combined company is to hit 120,000 barrels of oil per day (boepd) by 2025 and have an annual dividend minimum of $60mn.

In an interview at Tullow’s West London headquarters last week, its chief executive Rahul Dhir said opposition to the deal came from a lack of understanding of the benefits. “Once people have [more information] they can objectively assess the combined business plan, pay attention to the synergies and recognise the very unique strategic position of the company, then [the rationale] becomes blindingly obvious,” he said. The company will hold a capital markets day in coming months to further lay out the merger plan.

Dhir said Tullow already had a “unique asset base that had been significantly underinvested”, and with further growth within reach if the significant debt servicing needs disappear. He pointed to successes this year in increasing production from offshore assets in Ghana as evidence that existing projects have more to give. First-half net production at the Jubilee field was 31,000boepd, compared with 25,000boepd a year ago.

Those capital constraints come from the company’s massive debt pile. At the end of 2019, debt covenants and disappointing production levels coupled with a weak oil price meant it came close to insolvency. A refinancing in 2021 reduced the risk by pushing out debt maturities and since then the higher oil prices have put it on a sounder footing, but total debt remains significant at $2.5bn, as per a July trading update.

The merger is grinding along – a shareholder vote won’t be until the end of the year, and the prospectus are yet to land.

Dhir put resistance to the deal from Capricorn shareholders down to risk arbitrage, where investors would push for the offer to rise after buying in post-announcement.

But since June, large Capricorn investors have been clear: no deal.

“The simple fact is, we don’t want Tullow paper,” Jamie Sherman, co-chief investment officer at Kite Flag Investment Manager, told Investors' Chronicle. His fund holds 6.7 per cent of Capricorn through cash-settled derivatives. “[Tullow] is high risk and highly-levered,̶1; he added. "This is effectively like a magic bean story, trading our dollars today for the promise of something in the future."

Legal and General Investment Management (LGIM) and Palliser Capital have also come out against the deal. Palliser and Sherman both said investors could simply buy Tullow shares if they wanted exposure, while the Kite Lake co-CIO said the bigger company could simply raise cash through an equity issue if shareholders were happy to see their stakes diluted.

Sherman said Capricorn should launch a strategic review to gauge third-party buyer interest, and if that does not bear fruit, then "return the bulk of the cash to shareholders" from both the India award and 2023 contingent payments from North Sea and Senegal divestments, while focusing operationally on the Egyptian assets it bought last year.

Tullow has an easier threshold to pass with the shareholder vote, with a simple majority, while Capricorn needs 75 per cent support to get the deal through. When the merger was announced, Capricorn chief executive Simon Thompson said it would “allow the two companies to accelerate investment in new opportunities across the continent, while retaining a resilient balance sheet and delivering attractive returns to shareholders”.

Stifel analyst Chris Wheaton, another sceptic, puts Capricorn’s net asset value (NAV) at 271p a share. He increased this in June based on contingency payments Capricorn will likely receive for the Senegal asset(s) it sold to Woodside Energy (WDS) in 2019.

Other analysts, covering Tullow, see the deal more favourably. The combination “makes sense strategically for the combined scale it brings in this production-led E&P era”, said Mark Wilson at investment bank Jefferies.

Posted at 09/8/2022 06:48 by waldron
Capricorn Investor Seeks to End Tullow Deal, Push for New Review

Scott Deveau, Bloomberg News




(Bloomberg) -- One of the largest shareholders in Capricorn Energy Plc is urging the oil and gas producer to call off its proposed merger with Tullow Oil Plc and instead run a more thorough strategic review that could create better value for investors.

Palliser Capital UK Ltd., which owns more than 5% of Capricorn, argued in a letter to the company’s board Tuesday that the terms of the deal ascribe no value the company’s non-cash assets and amount to a “nil-premium” takeover rather than the merger-of-equals it was billed as.

Palliser Chief Investment Officer James Smith said he strongly believes Capricorn is worth at least 330 pence per share, or roughly 50% higher than where its shares traded Monday and 67% more than the proposed takeover price. As a result, he argued the proposed merger amounts to giving away more than $500 million in value, or roughly two-thirds of Capricorn’s market value.

“Every day that the board fails to take action serves only to exacerbate the level of value destruction that Capricorn shareholders are faced with,” Smith said in the letter, a copy of which was reviewed by Bloomberg. London-based Palliser was founded last year by Smith, a former executive at activist investor Elliott Investment Management.

Representatives for Capricorn and Tullow didn’t immediately respond to requests for comment by email and phone.

Tullow agreed to buy Capricorn in June in an all-stock deal that values the combined company at roughly 1.5 billion pounds ($1.9 billion), according to data compiled by Bloomberg. The companies said at the time the transaction would open up opportunities to expand across Africa.

Smith noted that two-thirds of Capricorn’s net asset value is in cash and near-term receivables. As such, the purchase price ascribes no value to its Western Desert assets in Egypt, which were purchased less than a year ago for $323 million, he said.

A lifeline

He argued that the merger would exclusively benefit Tullow and be a “lifeline̶1; to the company and its creditors by providing it with access to Capricorn’s cash on a deeply discounted basis. Tullow is also a company that just last year was warning investors about its future given its chronic underperformance, the abrupt departure of its senior management team and a subsequent “fire sale” of assets to avoid insolvency, he added.

Smith questioned the other aspects of the deal, including the $50 million in synergies the companies said they would achieve. He argues that the bulk of those synergies would come from reducing administrative costs through the downsizing of Capricorn’s head office, and that merging with Tullow would hurt Capricorn’s environmental record by shifting the combined portfolio toward oil.

Smith said he didn’t believe the current terms would be approved by Capricorn’s shareholders and that Tullow is not likely to meaningfully increase the purchase price.

“We believe that the best way forward is for you, the members of the Capricorn board, to immediately withdraw your recommendation for the proposed merger and instead to initiate a transparent and meaningful strategic review,” Smith said. Any such review should be benchmarked against the value that could be created in the near-term by selling its Egyptian assets and returning cash to its shareholders, he added.

Posted at 14/7/2022 07:39 by ctc1
Tullow and Capricorn: gushing praise for merger of oil peers
Emma Powell
Thursday July 14 2022, 12.00am, The Times

Tullow Oil is struggling to overcome a credibility problem, with the scars of an overambitious and risky expansion emblazoned on the oil producer’s balance sheet. An all-share merger with its peer, Capricorn Energy, should hasten the reduction in leverage and recovery in free cashflows.

High debt and burdensome interest costs have prevented Tullow from capitalising on the steep rally in the oil price over the past 12 months, with the shares underperforming oil and gas peers. A tie-up with Capricorn would cut Tullow’s net debt of $2.1 billion at the end of last year, to $1.1 billion as part of a combined company, boosted by the near $700 million in cash on Capricorn’s balance sheet after a windfall settlement of a long-running tax dispute in India. Cost savings of about $50 million post-merger would free up extra cash.

Funds could be used to pay down debt quicker and cut interest costs, reinvest in existing assets in the hope of boosting cash returns or a mixture of the two. Higher interest rates might make reducing debt faster an appealing option.

Business briefingIn-depth analysis and comment on the latest financial and economic news from our award-winning Business teams.One-click sign up.
The increased scale and better leverage should make it easier to refinance Tullow’s remaining debt, which can’t be done on better terms before May next year at the earliest. Having more cash is one thing, but to win back investors, Tullow must prove it can generate good returns. Allocating too much to high-risk exploration has been Tullow’s undoing. In 2019, it took the axe to production guidance and ousted its then-boss, sending the shares down more than two-thirds, a level from which they have barely recovered.

With more cash in its back pocket, investors shouldn’t expect an enlarged company to return to the high-stakes speculation in years gone by, according to its boss, Rahul Dhir. By investing in increasing production from Capricorn’s assets in Egypt and Tullow’s oilfields in Ghana, Gabon and Kenya, management reckons free cashflows of $2.4 billion between this year and 2025 if the oil price stays at about $75 a barrel. Tullow’s average price during the first half of the year was $89 after the impact of hedging.



More than 90 per cent of Tullow’s capital is invested in producing assets. Between 2017 and 2019 it was more like 50 per cent, with the remainder ploughed into high-risk exploration projects that destroyed value for shareholders.

Post-2014, cashflow returns have frequently come in below its cost of capital, according to analysis by Quest, a division of brokerage Canaccord Genuity. Without the merger, analysts there forecast that trend will play out this year and the next. Analysts at Investec have factored in an average Brent crude price of $95 for this year, falling to $80 next year.


Full-year group production guidance has been maintained at 59-65 thousand barrels of oil equivalent per day (kboepd), which points to growth on the 59.2 kboepd produced last year. Over the first-half, production was running at 60.9. Increased production, elevated oil prices and the absence of the one-off costs incurred during the first six months should result in free cashflow kicking up to $200 million this year. That is expected to help reduce net debt from $2.1 billion to $1.9 billion by the end of this year.

Securing approval from Tullow’s shareholders for the merger should not be the issue; getting Capricorn investors on board might prove more difficult. The deal values Capricorn shares at about $900 million, calculates Investec, which looks low given its $670 million in net cash, Egyptian assets that are worth about $300 million and net contingent payments of about $175 million that it is in line to receive. But Tullow is a far more worthy partner than it was.
ADVICE Hold
WHY A merger with Capricorn could improve cashflow due to a stronger balance sheet

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