Tullow Oil Share Discussion Threads

[teamwork1] 17/11/2017 08:46

Tlw been dropping for past week

[fuji99] 17/11/2017 07:57

Due to a strong consolidation in this sector already taking place, it would be shrewd to be heavily loaded in oil regardless of stories, shorts, longs and all the gossip stuff and I mean it.

[fuji99] 17/11/2017 07:20

TLW is in safe places where turmoil is very low (mainly Africa).
It has a very good management who turning around efficiently the company.
As its share price does not reflect its potential and its real value, it will be a takeover target by the majors very soon as consolidation and takeover activity is starting to brew in this sector.
According to the Telegraph major oilers are circling Petrofac.
Is TLW next ? ...

[mcsean2164] 16/11/2017 21:35

Mirabeau,

There was a placing to reduce debt this year and it worked.

They are reducing debt.... My question is why the drop now?

[frazboy] 16/11/2017 20:56

We've also had a production upgrade, a predicted shortening of the required downtime for the turret repair and approval of thegreater jubilee field development plan... by my calcs we should have only seen a 10p drop in the share price in reaction to the OP correction

I agree with Mirabeau, the debt, specially the RBL is a concern, and the bonds are hardly cheap to finance (their price has hardly budged in the last couple of days, by the way). So, in some ways a rights issue would not be a massive concern but I still don't understand why they didn't make the last one a little larger!?

There was a poster on here this morning who had been trading these, and after the price drop was left with a larger holding than they wanted - that's my predicament too, but I've done a hefty bit of my own research and think that the shares are reasonable value at current prices so not unduly concerned.

One question tho - why on earth is FCF only $400m this year - my spreadsheet says it should be 500 plus - all sensible suggestions welcomed.

[mirabeau] 16/11/2017 20:16

Debt's the killer here. As with PMO and ENQ. Debt eats into equity and equity is your ownership of the business. Debt's the cancer

A shame. Why management take on debt to buy assets is beyond me. I'd say it's more akin to empire building rather than building a sustainable business

[mcsean2164] 16/11/2017 20:10

frazboy,

I just doesn't make sense to me, look at poo:



It still over $61!!

We've had the positive ITLOS ruling, successful fund raising and they share price has collapsed to mid September value. TLW seems to be really unliked for some reason.... anyone know why?

[frazboy] 16/11/2017 17:54

So 5m of the 33m trades over those days were the shorters increasing their positions - it certainly wouldn't have a positive impact on the SP, but disappointing that it wasn't balanced by longs seeing value - perhaps understandable with the IEA report etc

[cheek212] 16/11/2017 17:27

Reported shorts are up today so could explain the price drop over the past couple of days, up 0.3% to 7.3% on the 14th and 15th.

[fuji99] 16/11/2017 16:06

It's the Saudis who will do it via their "coalition", friends and family.
The new "king" is nuts to the point of highjacking even prime ministers ...
Where is Lebanon prime minister now ? So with this guy, war is just another game.

[ifthecapfits] 16/11/2017 15:37

Hmm. War coming to the ME? Not that facts get in the way. Not sure Iran has ever invaded or attacked any sovereign state for many hundreds of years.

[fuji99] 16/11/2017 14:30

Three important factors that make oil stocks and Tullow in particular attractive: 1/ Efficient and cash focused management 2/Middle East turmoil (Saudi/Iran the biggest reserves holders etc) and 3/ Winter on its way with "analysts" suddenly finding out or should I say "discovering by miracle" that more oil is needed as inventories are wrong again ... as I wonder why oil price keeps creeping up for a while now and is over $60.
So I stick to my oily stocks.

[teamwork1] 16/11/2017 13:44

That's more like it

[fuji99] 16/11/2017 12:47

And there was not talk of a debt when it was powering over £2.

[fuji99] 16/11/2017 12:29

Suddenly there are debts and all the stuff.
So the shorters are biting their fingers to make the share price go down ?
The share price does not want to move and they are impatient.
A spike up will breach their stop losses.

[nicebut] 16/11/2017 12:06

Ok. see your thinking...I guess any funder is squeezing TLWs` balls, so to speak- extracting the most from any RBL or other deal.

[frazboy] 16/11/2017 11:35

i don't think there will be nicebut, but with current total debt of $3.6bn (see November update) of which $1.6bn is bonds and $2.0bn is bank loans (RBL facility), and a desire to have a minimum liquidity headroom of $0.5bn, this means they need new financing of $2.5bn which has to be secured against the producing assets (basically TEN and Jubilee) which is not exactly peanuts. The reserves at TEN and Jubilee will be around 225m barrels at end 2017, so that's roughly $12 of borrowing per barrel.

Nore generally, as a shareholder, would you rather the company issue equity, or paid a higher price for its borrowings? Essentially those are the options, and it does of course depend on the terms on offer! I think shareholders would rather run the risk of higher debt and greater future returns and I'll take management at their word and assume that the new RBL facility negotiation is well advanced (The ammortisation schedule in the old one was too aggressive for the current oil price).

[nicebut] 16/11/2017 11:20

They`ve only just had a rights, why would there be another?

[leoneobull] 16/11/2017 10:49

Looks like a bargain at this share price

[frazboy] 16/11/2017 08:57

Not sure about the Cheek, but we'll see when the short tracking data is updated. The sell off is probably just a combination of stuff, long term holders reducing, appetite for risk dropping, and the bearishness of the IEA report is probably just fuel for the fire.

Happy to hold.

[cheek212] 16/11/2017 08:43

And also Brents currently up so makes sense that Tullow is down!!!

[cheek212] 16/11/2017 08:38

IMO the share price action suggests shorters using BOTS to buy shares and close down their positions. There are still 7% of shorters that we know about and these have been reducing pretty much every week. At the current share price, I suspect they are closing down as much as possible without pushing the price back up too far.

[frazboy] 16/11/2017 08:33

The share price action does suggest a rights issue might be on the way, all rallies are being sold into. However, the November update did say this: "The RBL re-financing is on schedule to complete before year-end", which should rule that out. All very odd.

[nicebut] 15/11/2017 18:39

someone clearly been dumping- Expect we`ll get an RNS at some point...Then when PoO rebounds it`ll probably go up as fast as it went down. Perhaps.