 @xxnjr
Brevarthan were far too negative last year. I am sure you will be pleased to observe the $4.7bn reduction in Euro bond debt the Government of Ghana has just agreed with creditors which amounts to a 37% haircut on their holdings. The finances has now been stabilised allowing bills to be paid ! Any long term holders of Tullow will know the Ghanaians are not famous for regular payments but the bill has always eventually been paid… mainly because the alternative is a lot more expensive for them! Unless you are suggesting they default on their cheapest source of energy to pay for the more expensive ?
Brevarthan have a timely habit of coming out with research just in front of bond refinancings. I recently viewed a conference call with Andy Inglis of Kosmos saying that Jubilee would only temporarily be affected by the J69 well and that reserves would allow production at 90k gross on the field for almost the next decade… despite the siren voices from Brevarthan about declining production (the J69 well, which was the last one drilled saved them from total embarrassment on their previous forecast in my opinion)
The also know that the interim results are not flattering to the cash position as tax payments and capex were concentrated in the first half and there is major cash generation in the second. They refer to the future lease obligations on the Ten FPSO with Modec but do not acknowledge when quoting the total future lease liability (from my recollection) either the annual breaks post the 10 year anniversary nor the reduction of approx $50m pa in the charter rate shortly afterwards.
Incidentally, I was pleased to see Total confirm production commencing next year in Uganda when they recently reported …which implies potential royalties for Tullow.
Like many other shorters they like to wind people up about the spurious branch profits tax claims of the Ghana Government…just so long as they appreciate an uplift in value if they are dismissed 😉.
Then we have Kenya. The government can’t have it both ways…either let Tullow get on with project commerciality or be prepared to go to tribunal and run the risk of being made to repay up to $2bn of sunk cost ! Funny how Brevarthan dont want to talk about that little legal conundrum ! Booty
Please do not rely on the facts and opinions expressed in the above post when making an investment decision. Always do your own research. |
Pioneer you make some valid points there. Good one. Remember no one hates the Palestinians as many countries have provided sanctuary to them scattered all over middle east and also western countries.
I hope in my lifetime I see both Israel and palestine living side by side. It's almost like they need some sort of divine intervention to bring about peace as peace is so far away right at this moment. |
I don't fall out with what you say but never the less the surrounding Arab countries do not like the Palestinians whether they are being attacked or not. The surrounding states will support them in their struggle against the persecution that is happening right now but will not take them in because they are seen as trouble makers. |
Anyway enough of this. Too many double standards. |
Little bit I'm not trying to prolong this but the countries around palestine do not hate them. You'll remember that many times those surrounding countries fought wars with isareal. 1967 and before abd after that. 1963 lead to pil price hikes.
But everytime the usa provided weapons of total destruction to Israel ans the military capabilities are no match.
Imagine your home being intruded by burglars abd they kill your family. Would you have a right to defend yourselve and your family and your home. Simples
I am against occupation by any countries and I support the oppressed.
1920 to 1945 hiw many times were any anybwars in palestine? It was a prosperous country. As soon as zionist went there......... |
Maybe of interest to anyone in TLW for the long term (as opposed to day/short term traders). Research from Brevarthan with some questions raised on possible lease arrears due to Tullow from GNPC. To be fair, one could argue, previous Brevarthan stuff on Tullow has offered a more realistic perspective on the company than the company itself portrayed!
"Tullow Oil (TLW LN)
Elsewhere, our other favourite oil short, Tullow Oil has, as expected (see earlier posts) failed to deliver with its 12 month long Jubilee field drilling campaign. Gross oil production forecast at the main asset, the Jubilee field, has dropped to 90kbd from 100kbd in 2024, with 2nd quarter production there running at 87kbd (down to 85kbd in June). For the first time in recent history there was talk of a disappointing production well (J69) with reservoir rock poorer than expected (notably J69 is not far from the delineated southern perimeter of the field - see graphic below). The field is now over 20kbd below where expectations were set at this point in the year (87kbd in Q2 - per Kosmos Q2 announcement) versus indicative dashed-line plots on prior company presentations at around 110kbd. Every 5000kbd lower production at Jubilee reduces monthly cashflow by c$5m and annual cashflow by $60m. And every $5 lower oil price overall lowers monthly cashflow by approx $10m and annual cashflow by $120m. It wouldn’t take much of a move in either of these metrics to eviscerate Tullow’s annual forecast free cashflow. Recently Brent oil has been languishing around $70 (around $10 below Tullow’s reference point in its guidance) and Tullow’s Jubilee guidance has been reduced, both increasing the likelihood that net debt grows, rather than shrinks at year end.
Jubilee J69 well indicated below (per Kosmos earnings slides Q4 2023) - Is the footprint of the field smaller than originally perceived?
Tullow certainly faces some pressing issues currently:
As related above, disappointing production and reservoir question marks at Jubilee (the main field in its portfolio). We note the company has commissioned new 4D seismic over the field, which suggests it may have some concerns over its original reservoir model arising from this J-69 issue.
Upcoming refinancings of its bond portfolio (the 2025 and 2026 notes) with market interest rates higher and the reserve base likely diminished.
Potential adverse ICC awards (one expected this quarter with a claim of $320m against Tullow, two likely in 20
26) that could cost the company $100’s of millions in compensation to the Ghana government (total claims add up to around $800m in total)
The role of the GNPC and its ability to pay its fair share in a timely fashion for JV costs. While clarity is lacking, we can see a somewhat concerning trend in lease balances. Since the option to purchase the TEN FPSO lease was not taken, lease payables amount to $656m non current and $147m current. Amounts due from JV partners amount to $296m non current and $441m current. This would imply, given Tullow's 55% stake in TEN, that around $380m of current receivables from JV partners either do not relate to the FPSO or are in arrears, or reflect capex in arrears - quite a high number given Tullow’s overall capex guidance for the year ($230m). Interestingly the text in Tullow’s accounts for the interims mentions “loan balances” in Ghana (the annual report mentioned increased loan receivables from GNPC, Annual Report p157). Presumably these are “loans” from Tullow to GNPC, perhaps a euphemism for GNPC’s failure to pay? If those loans are not paid back, Tullow’s balance sheet will be considerably weaker, given that it is still on the hook for FPSO lease costs, JV capex etc. I will return to this in a later note.
Meanwhile, while pressures mount above, net debt remains high at $1.7bn at the half year mark, and debt capacity falls with the maturing of the Senior Secured RCF in December and the maturity of the $0.5bn secured note in March 2025. Finally there is around $1.4bn outstanding on the May 2026 Senior Notes. Against those liabilities is just $280m of the 2028 Glencore financing facility and the cash balance of $276m some of which sits in JV bank accounts. The current ratio is approx 0.7x and if write off the presumed GNPC liability to Tullow that ratio falls below 0.5x. If Jubilee continues to disappoint and one of those ICC cases goes the wrong way it all looks pretty distressed from the perspective of equity holders....." |
I think you need to look at Middle East history to understand the issues with the Palestinians. I think you will find the Jordanians killed several thousand of them. I think you will be surprised of how the surrounding countries view of the Palestinians. Basically they hate them and see them as trouble makers. Surprising and very sad, but true. Anyway back to oil..... |
For arguments sake.... How many Palestinians were killed by the Jordanians in the past? It's not very nice reading. |
Only hope for peace is international law. No one in thus entire planet would accept being illegally occupied for 76 years.
Imagine the French came and ilegally invaded Britain and slowly killed snd took more and more British land. I'm no supporter of these fundamentalist gangsters but the root causes are well known even by the staaun supporters of satanyahu |
Indeed they do. Let's hope the tipping point is not faraway in Iran for a change. |
You sure you're talking about khaneni? Thought you were referring to satanyahu. Either way the lines fit both |
Up just a little bit
The varst majority of Iranians hate Ali Khamenei and his totally oppressive theocratic regime. |
No doubt they'll target more civilians children elderly etc. And say human shields. Yet mosad is in a crowded populated residential area |
Lets wait for the Israeli's holiday to finish today and see what they do. |
Jan Oil contract is trading lower than spot price, so we are in backwardation. This rally may not sustain beyond Oct-Nov. |
Dear south west London, I don't think Ali Khamenei will give two hoots what the US do or say if Iranians are in a fight for their survival. |
With the US election due that's not gonna happen |
Although the above report is from November 23 there is no difference. |
https://auroraer.com/insight/strait-of-hormuz-report/ |
Close the Hormuz straight and oil hits $120. |
*BIDEN SAYS DISCUSSING ISRAEL STRIKING IRAN OIL FACILITIES |
keep rallying Oil! burn the shorts give them generational nightmares. |
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