Tullow Oil Share Discussion Threads

[p@] 17/3/2017 16:11

leed-read it again!

[leedskier] 17/3/2017 16:03

In fact the share price will probably recover between now and the day prior to ex rights, depending on sentiment towards the company.

[leedskier] 17/3/2017 15:57

o a discount of approximately 35.3 per cent. to the theoretical ex-rights price of 201.1 pence per New Ordinary Share calculated by reference to the Closing Price on the same day.

[leedskier] 17/3/2017 15:56

Typo I read the RNS. The RNS makes it clear that 201p is the nominal ex rights price.

[typo56] 17/3/2017 15:55

leedskier, they're not ex-rights yet. They don't go ex until 6th April, so anyone buying between now and then will qualify for the 'discounted' rights. Anyone buying after will not, therefore the shares will be worth less, therefore they will fall in price.

As I keep saying, rights issues are smoke & mirrors. Existing holders aren't given any preferential treatment over anyone else. And the cost of taking up the rights isn't just 130p, it's also the value you've lost in the nil paid shares. The two added up are equivalent to simply buying new ordinary shares in the market!

[leedskier] 17/3/2017 15:46

So this is now trading at just above the nominal ex rights price of 201p. At that price it should represent value. The reason being that the Nil Paid shares will have a nominal value of 25/49 x 70p = 35p. So the real cost of shares bought today is 202p (assuming that is the current SP) less 35p = 167p.

That of course assumes that when the fund raise has been completed the share price does not fall below the current share price

[phillis] 17/3/2017 15:43

and you will have a better capitalised company

[2jester] 17/3/2017 15:42

"you havent lost anything"

"you will have a lower cash balance"


Lol, just lol.

[hiddendepths] 17/3/2017 15:32

Ed123 - belated thanks for pointing out my error!

[nicebut] 17/3/2017 15:31

LOL- its is bloody typical!

At least I was buying at 237 and not 350...Bought some more today just below £2.

[phillis] 17/3/2017 15:29

Assuming you were a (unhappy) shareholder last night - like Nicebut (well done Tim) - then as long as you take up your rights , you havent lost anything
You are just averaging down (and you will have a lower cash balance!!!!)

[leedskier] 17/3/2017 15:10

The real money is made by astute traders of the Nil Paid shares.

[steve73] 17/3/2017 15:06

So what will the impact be on anyone short on RI day? Will they need to go more short to cover?

[dodge meister] 17/3/2017 14:33

Wow there we a lot of errors in my message...spread betters accumulate shorts up to 3rd I ment to say

[dodge meister] 17/3/2017 14:32

With a heavy discount rights issue there is usually heavy demand, less so from the spread betters who won't be able to take part. The will be a rise is so up to the third but the spread betters will accumulate to take advantage of the ex date when son share holders will sell to realise the profit on their discount...well that's my thoughts anyway

[lodgeview] 17/3/2017 12:48

Short to 0p

[frazboy] 17/3/2017 12:17

The debt is around $4.0 bn post Rights Issue.

And unfortunately for Tullow then can't even deleverage as much as they would like this year. As we stand today they cannot take full advantage of TEN's FPSO capacity due to the moritorium on drilling until September/October this year (government wrangling over a border). They're currently only have 50,000 bpd of well production capacity against an FPSO capacity of 80,000 bpd.

[mercer95] 17/3/2017 12:13

Same thing happened last year, 6 July with a £300 million bond issue, big fall, small recovery, bigger fall, Tullow has been trading for 32 years, founded in 1985,to carry so much debt, 3 or 4 billion, whatever it is & no dividend to pay & now a rights issue is staggering, I was hoping once ten came online Tullow could reduce the debt, didn't happen.

[steve73] 17/3/2017 12:05

Rich - you understand my thinking totally... So continuing your logic, I could then buy 49@177 and get rights for 25 more at 130, making 74@ 161 & so the price should drop to 161....? rinse and repeat and we steadily drop 151, 144, 139, 136, etc...

After I'd realised this I sold my holding (at 203, for a slight loss) and will probably think about buying a few back at perhaps a 5-10% premium to the RI price... There should be plenty on offer at that time.

[sux_2bu] 17/3/2017 11:59

So it's a Scam...apparently

[sux_2bu] 17/3/2017 11:58

Tullow Oil

Tullow has come to the well again, this time the equity market, where it has announced a 25 for 49 rights issue at 130p to raise £607m. At a 45% discount the shares were fully underwritten which is no great surprise, a good deal of hands being rubbed together at the long list of associated investment banks. The money will shore up the finances which are now looking a lot better than they were and with the debt restructuring and asset sales the balance sheet is almost unrecognisable, it even has cash coming inwards… On the subject of asset sales the company announce that CNOOC has exercised its pre-emption rights in the farm-down to Total in Uganda and will take 50% of the deal which of course doesnt affect Tullow.

Tullow came out of the bucket list in January at 315p having been one of last years best performers, up 203% on the year. I didnt see this coming but did feel that such a performance in a £3bn market cap stock would be difficult to repeat. It won’t go back in yet but shareholders who sold at that price would find it easy to buy back at this mornings 202p, those who didnt sell can take solace by being offered fully underwritten stock at 130p, knowing that part of their money is going to underwriters, what a scam…

[sux_2bu] 17/3/2017 11:57

Coming back to where ?

It's got a long way down to go unfortunately, for holder.