Tullow Oil Share Discussion Threads

[ny boy] 24/4/2017 13:42

They took the money for the rights from my account last week. Expecting a positive move higher, as long as oil stays above $50 bl.

[opodio] 24/4/2017 12:44

WOW 400p comig imho i jhopw

[lodgeview] 23/4/2017 23:03

If I bought onto Tulllow tomorrow could I take up the rights issue?

[mariopeter] 21/4/2017 09:43

26th April trading update and AGM.

Market weak as some holders sell to buy the rights and oil price a bit naff.

Death crosses on chart above not good. Pretty much run their course.

[chessman2] 20/4/2017 18:52

Clever mbalewala, I tip my hat to you. I also bought Tullow in the 80s but am still here.

Fortunately I also bought Dragon and held till the end. I sense that Tullow will now go forward and grow. Basically I'm confident about the future.

[mbalewala] 20/4/2017 17:45

I bought this back in the eighties at 86p,sold them at £11,then went to Dragon oil,sold out to sand dwellers thieves of dragon oil,now I have come back at £2.45p,I hope my luck is still with me.

[walbrock82] 20/4/2017 13:39

For those who want to know how Tullow Oil Rights Issue affects their shareholdings. The primary purpose is to understand the calculations from two shareholders’ perspective.

(P.S. The illustration below is written a week ago, since then the shares been declining.)

For a compelling illustration of the Rights Issue, I will use two imaginary shareholders of Tullow Oil.

Investor A bought the shares at £8.32/share.
Investor B took advantage of the big decline and bought in at £1.60/share.
Both shareholders hold 10,000 Tullow in their portfolio.

First, the initial investment.

Investor A paid £83,200.
Investor B paid £16,000. Spot the difference!

Both investors are buying the Rights Issue and selling it in the market.

P.S. I am going to £2.29/share (13/04/2017).

As they have a similar number of shares, both investors are entitled to the same amount of Rights shares.

The Maths: - 25 for 49 Rights mean you get to subscribe for a further 25 new shares for every 49 shares held.

Take 10,000 shares and divide by 49, then multiply by 25.
(10,000 ÷ 49 = 204, then 204 x 25 = 5,102 shares)
At £1.30/share, you pay £6,632.

After the Rights, both investors would see their shareholding rise to 15,102 shares.
Also, it means the initial investment increased by £6,632. So,
Investor A paid £89,832.
Investor B paid £22,632.

Selling the Rights for £2.29/share means both would earn a profit of £5,051.
However, the returns are different for both investors.
Investor A earns 5.6%.
Investor B makes 22.3%.

Keeping the Rights
If both investors keep their rights, what would be their breakeven price?

Investor A: £89,832/15,102 = £5.95/share to break even.
Investor B (not breakeven, since the shares rose): £22,632/15,102 = £1.50/share.

What if the shares got back above Investor A, (initial purchase price) of £8.32/share?

How much would investor A makes if Tullow’s shares rise back to the original breakeven share price?

Answer: £8.32/share multiply by 15,102 shares = £125,649. Minus £89,832 means £35,816.64 profit.

For more calculations and explanation on Tullow Oil’s Rights Issue, click here:

[mcsean2164] 20/4/2017 10:03

Yep, I went in yesterday and got a shock. Should've posted here!

[billy_buffin] 20/4/2017 09:37

Ngamia South & Amosing Updip Appraisal (formerly Amosing-6?)
• Drilling nearing completion
• Testing flanks of existing fields

From upbeat April African Oil AGM

[declan2] 20/4/2017 09:35

240p more likely chaps

[eodfire] 20/4/2017 08:59

Good luck with 130/170 targets. Lots of support around 200.

[bookbroker] 20/4/2017 08:28

170p target!

[billionaire1] 20/4/2017 08:10

any chance we ll hit price £1.30

[billionaire1] 20/4/2017 08:10

any chance we ll hit price £1.30

[sux_2bu] 19/4/2017 20:45

TLW about to become much cheaper. oil tanking.

[ny boy] 19/4/2017 15:26

Buy the dips Sir!

[walbrock82] 19/4/2017 11:54

(P.S. All data got converted back to British Pounds.)

The company has been through a rough three-year patch that saw long-term shareholders lost all capital appreciation dating back to 2006!

Recently, Tullow Oil asked its shareholders to fork out $750m in a Rights Issue at a discount of £1.30/share.

Is this the turning point for Tullow and a change in fortune for its shareholders?

First, Tullow’s shares didn’t initially fall because of collapsing oil price. It fell because operating profits collapsed to £245m in 2013 from £700m, along with large capex spending in the future.
But declining oil price did exacerbate the shares lower by another 60% from £6-£7 per share.

To explain my answers in a concise and clear answer I want to dissect Tullow Oil into two sections:
1. Operational;
2. External.


Operational

(Period discussed is from 2006): -
A. Tullow Oil spends £9.6bn in finding the replacement of oil sold and building up its reserves.
That resulted in oil reserves & resources increasing by 686m to 1,193m. Given that Tullow sold 243m over this period, then the capital spend per barrel is £9.6bn ($14bn) divided by 929m = $15 per barrel.
The $15 per barrel capex doesn’t include the operational costs of extracting the oil on an annual basis. Add in operational costs per barrel, the cost of oil totals $71.9 per barrel in 2016.

B. Despite the big spend, sales volume of oil increased by 2,600 bopd, a 5% growth.

C. Despite years of producing oil, Tullow Oil has rarely generated positive free cash flow. In fact, it lost a total of £4.4bn. target='_blank' />

D. Last year, oil production came to 71,700 bopd in 2016. A year ago, it gave a production for 2016 of between 78,000 to 87,000 bopd, a 10%-24% miss.
One big reason is down to its Jubilee field in Ghana. That oil field contributes around 26,000 bopd to Tullow Oil (or, around 35% of total oil production).

E. With this year oil production guidance of 88,000 bopd, it already downgraded this by 5,000 bopd.
F. As mentioned earlier, the level of total debt grew from £214m to £4bn, while sales doubled.

Now, for the external factor, mainly the role of WTI/Brent Oil.
(This period is from 2011 unless stated)

The collapse in oil price has affected Tullow Oil business in the following ways:
A. Tullow generated sales of 25 pence for every pound it holds in assets. Now, it does 10 pence.

B. With capital turnover, Tullow is returning less than half.

C. Net cash earnings fell to £417m from a peak of £1.1bn.

D. Tullow, also written-off impairment charges totalling £5bn.

E. In 2016, half the oil was hedged at $75 per barrel, this enables the firm not to experience the full impact of adverse oil prices. Today, it can only get $60 per barrel for 45% of oil production.

For 2017

Reasons to be optimistic are: -

A. Capex spending cut to $500m this year, down from $900m last year.

B. Hopefully, it could achieve higher oil production of at least 80,000 bopd.
C. OPEC oil production cut to maintain oil prices.


Reasons to be pessimistic are: -
A. This year oil hedge is 20% lower than 2016, it puts pressure on margins.
B. U.S. oil production dampening price increase. target='_blank' />

C. Further operational production disruption possible.

D. The North Korean crisis looking likely as both sides won’t back down. That would dampen trade and economic activities.
E. New share outstanding of 1.38m values Tullow at £3bn. It would limit any gains in the share price.

For more details and explanation, here is the full post:

[moneybags] 18/4/2017 12:15

NP Options are getting nearer to where they should be.

[oilretire] 16/4/2017 20:20

.........received a boost last week when Moody’s, one of the world’s main debt ratings agencies, raised its outlook on Tullow’s credit profile to ‘positive’ from ‘negative’.
“Interest levels are high for the Tullow rights, and as a result of the cash injection Moody’s have raised their rating on the debt,” said Darren McKinley, an analyst with Merrion Capital in Dublin. “But Tullow still has a significant amount of debt and, at current levels, the upside is limited we feel.”
New investors
The level of trading of the rights suggests that the company will see a number of new investors come on board, according to traders.

[cbr60000] 14/4/2017 22:50

Phillis,Sorry, didn't mean my post to be directed at you. Anyway, I think there is a flaw in my methodology. Not sure I can buy additional NP shares above my 2-1 allocation?

[phillis] 14/4/2017 17:31

Because I have enough?

[cbr60000] 14/4/2017 16:08

Have read all posts since notification. So, why wouldn't you take a punt on buying some MORE Nil paid NOW, top up to the £1.30 on the 24th and square off any losses if you bought in higher than current or prevailing price when they transition to ordinary shares?

[phillis] 13/4/2017 18:50

JB has played only 3 ODI s in recent months yet is not allowed to play for Yorkshire
Stokes et al are in the meantime coining it in the IPL
Brave new world!