Tullow Oil Share Discussion Threads

[carla1] 17/3/2017 08:05

Oh .. I feel for you NY BOY...25k + down in a day !!Or is it JACKANORY :-)... I think I know which one it is !!

[oilretire] 17/3/2017 07:51

(v) is interesting. I wonder if they have something in their sights that is priced attractively at the moment but won't be 6 to 12 months down the line if POO recovers

[topdoc] 17/3/2017 07:51

oh dear down to rights issue price

[oilretire] 17/3/2017 07:48

Clear enough I guess. Reset & onwards & upwards......

Reasons for the Rights Issue



As a result of these operational and financial measures, the Group has re-set and streamlined its business for low oil prices. However, the combination of low oil prices and the significant development expenditure required by the TEN development has resulted in the Group's gearing exceeding its policy of less than 2.5x net debt/Adjusted EBITDAX. Although Tullow began to generate free cash flow in the final quarter of 2016 as the TEN development started production and commenced repayment of its debt, as at 31 December 2016 the Group's gearing remained high at 5.1x net debt/Adjusted EBITDAX. Tullow has continued to generate free cash flow and repay its debt since 31 December 2016. However, in light of its high level of debt and the resultant lack of financial flexibility, the Group intends to accelerate the reduction of its debt towards its gearing policy of less than 2.5x net debt/Adjusted EBITDAX through a combination of the receipt of the net proceeds from the Rights Issue, improving cash flow from production growth, and value enhancing portfolio management activities, including future asset sales and farm-downs.



Use of proceeds



The Directors believe this stepped reduction of debt will improve Tullow's financial and operational flexibility, and enable growth within the next three to five years by allowing the Group to:



(i) invest in further infill drilling opportunities in both its operated and non-operated portfolio;

(ii) undertake exploration and appraisal around the Jubilee and TEN fields to further develop the high return near field resource base;

(iii) undertake further exploration and appraisal activity in Kenya to further prove up the resource base;

(iv) drill high impact, potentially high return prospects across Tullow's African and South American portfolio; and

(v) take advantage of other opportunities that industry conditions offer.

[oilretire] 17/3/2017 07:46

At least we all get the rights (I assume?). Still a bit of a surprise though, I thought they were out of the woods balance sheet wise??

I see CNOOC have exercised pre-emption rights in Uganda.


CNOOC Uganda Limited (CNOOC) has notified Tullow that it has exercised its pre-emption rights under the joint operating agreements between Tullow, Total and CNOOC to acquire 50% of the interests being transferred to Total on the same terms and conditions that were agreed between Tullow and Total (including as to the amount, structure and timing of the consideration payable to Tullow).

[wantmorethan24p] 17/3/2017 07:28

at 130p..what a discount.

[manics] 17/3/2017 07:15

Tullow Oil plc

Proposed 25 for 49 Rights Issue of 466,925,724 New Ordinary Shares at an Issue Price of 130 pence per share

-yuck

[technowiz] 16/3/2017 14:03

tanking big style.

14:02:39 239.2000 250,000 NT 239.1000 239.3000 Sell

[sux_2bu] 16/3/2017 13:36

No bid chatter......the market would know before any of us.

[opodio] 16/3/2017 12:59

bid chatter gain

[sux_2bu] 16/3/2017 12:31

Chaps, i've had another look and although 218p will secure the gap, a little over shoot is usually the norm, maybe 215p......

I maintain my believe that gap will be filled and then a nice bounce.

Keep the faith.

[shujja1] 16/3/2017 11:39

I also bought in about same price for possible take over .

[ny boy] 16/3/2017 08:22

Nicebut..good timing with that 30k purchase the other day!

Bought in @ 250p recently, holding long term for recovery and possible takeover

[oilretire] 15/3/2017 14:51

From wells to watch in 2017....


Guyana Suriname basin: Industry hotspot
The Guyana Suriname basin has been an exploration hotspot since ExxonMobil’s discovery of the
giant Liza field in the Stabroek Block offshore Guyana in 2015. With three wells drilled on the
structure, the company estimates that the field holds over 1bnboe. The Upper Cretaceous reservoir
is described as being very high quality with good porosity and permeability, and good deliverability
on test. Appraisal well Liza-3 has also encountered hydrocarbons in a deeper previously untested
reservoir that is estimated to hold 100-150mmboe. The well also found the oil water contact in
these deeper sands, which will increase the accuracy of resource evaluations. The company’s most
recent exploration well in the region, Payara-1, approximately 16km north-west of Liza,
encountered similar high-quality, oil-bearing reservoir in January 2017. Wood Mackenzie has
estimated that Payara contains between 300mmboe and 500mmboe. The co-venture partners in
Stabroek (ExxonMobil 45%, Hess 30%, CNOOC Nexen 25%) plan to continue the appraisal of Liza
and Payara together with exploration drilling in 2017. The Stena Carron drillship has now moved
10km south of the original discovery well to drill the Snoek prospect, which will test a stratigraphic
trap similar to those found in Liza and Payara.

Meanwhile, Tullow is planning to drill in
Suriname for the first time in H217 on its Araku prospect in Block 54.

Araku: 500mmbbl potential to the east of Liza
Tullow has built up an acreage position covering over 10,800km2
across Block 47 and Block 54
around 200km offshore Suriname and sitting to the east of Liza. In addition to the success at Liza,
oil seeps onshore Guyana and the oil-producing Tambaredjo field onshore Suriname indicate the
migration of oil to shore across the basin. The Araku prospect is located in Block 54 in around
1,000m of water and is operated by Tullow (WI 30%) with partners Statoil (50%) and Noble (20%).
The prospect sits on the Demerara Plateau and on the edge of the basin near the shelf edge break.
It is described by Tullow as being one of its strongest prospects in the last decade and is estimated
to have a resource potential of over 500mmbbls. Araku covers over 330km2
and is a four-way,
dome-shaped structural closure with an Upper Cretaceous Maastrichtian target. A 3D seismic
survey was acquired in 2015 and has provided high-fidelity data that indicate good seismic
amplitude support across the prospect. The company has been particularly encouraged by the
precise conformance between the prospect area as indicated by both structural mapping and
geophysics, thereby giving a good indication of hydrocarbon presence.
If Araku is successful, Tullow has a number of follow-up prospects across both its blocks and
covering stratigraphic and carbonate prospects. A rig is currently being sourced for the well, which
is expected to cost $14m net to Tullow to drill. The gross cost estimate of $40-45m is at a significant
cost reduction to the $100m cost estimate before the current low-cost oil environment.
Tullow also holds acreage offshore Guyana and sitting updip of Liza. The company will carry out a
3D seismic programme over its Orinduik and Kanuku blocks (Exhibit 3) in 2017, with a view to
drilling here in 2018/19

[mariopeter] 15/3/2017 11:56

I am here as I feel they will farm down some of Kenya for cc $3bn in cash. Leaves a very stable Company generating $1bn in cash at $50 oil.

Also chance of a bid as extraction costs are very low at $14 a barrel. Majors are under pressure to reduce their extraction costs and what better way than to snaffle up a wee company like this.

[bookbroker] 15/3/2017 10:49

The debt here is way too high relative to mkt cap., I can not stand cos that base their trajectory on the basis of projections falling nicely into place, this is rarely the case, and with capital investment this co will need to raise capital, debt capacity or not. Ok so we have a relative calm in the Mid-east currently, but i do not see US production tapering off, and there are still some big projects ramping up production still such as Brazil, they talk about a rebalancing, but the US is likely to sell some of their strategic reserve, and rigs that were requisitioned two months ago will still raise production there1

[ifthecapfits] 15/3/2017 08:44

Thanks. I guess the next question is when/how is this due to be paid off. What's the timetable.

[mariopeter] 15/3/2017 08:40

Latest debt was net $4.8 bn
1 bn spare debt capacity

In finals

[sux_2bu] 14/3/2017 18:11

Another gap

Folks, don't panic. The good news is, the other - small - gap is circa 260p to 262p

Just this lower one to get out of the way. Have faith.

[ifthecapfits] 14/3/2017 15:43

Does anyone on here have an analysis of the latest debt position or know where I can find such info. in summary form.

Thanks.

[sux_2bu] 14/3/2017 15:02

It's call sticking my neck out and sticking to my target. At least im honest.