Tullow Oil Share Discussion Threads

[lullabite] 25/11/2017 14:55

Then is weird to see tullow trading at lower prices than It was when oil was 20 %lower

[mariopeter] 25/11/2017 09:50

Incoming capital increase... think you are suggesting a rights issue? Absolutely not as they did that already and further issuing shares is too expensive (The cost is earnings per share given to new shareholders). Debt is significantly cheaper. West Africa is repaying bank debt at $1b a year and in 2 years all bank debt is gone. Even I fund my car over five years. I actually felt the last rights issue was unnecessary... the bankers didn't even ask for it but the directors must have felt vulnerable.....better safe.

Thanks xxnjr1 for your interesting link and feedback. Its common that capex is repaid before these locals get anything but will build in a new cost of 8000 bopd. Using your figures and thanks for that, that shaves off $175m from the $1128m surplus cash each year.

I hope people here don't confuse surplus cash with profit.

[xxnjr1] 25/11/2017 08:36

mariopeter - thanks for doing the calculation for 2018.

Using the hedge (38500 bopd at $51) and unhedged 56500bopd at say $60 gives an average selling price of $56.47/bbl. Fair enough. Where things get slightly more complex is when we consider the effect of Royalty or other PSC/PA effects on sales volumes. For example, 5% of Ghana produced oil is deducted as a Royalty, so that doesn't count as sales. And in the worst case example, 100% of Etame production, yes 100%!, is deducted as a Royalty, or some other brown envelope exercise. So all 1100 bbls/day of Etame production goes out the window without generating any revenue, although TLW pay the OPEX to produce those barrels. You can find the "Net Daily Entitlement as % Production" ratios at the back of TLW's Interim Fact Book.



Edit: Did a quick back of an envelope stab at this. Looks like Net Entitlement Production circa 8Kbopd off your number; i.e NEP 87Kbopd on your 95Kbopd.

[lullabite] 24/11/2017 15:15

Do you guys think theres gonna be an incoming capital increase ?
Dont really know why tullow is trading this low And these brent prices

[mariopeter] 24/11/2017 14:23

I reckon production will be cc 95000bopd in 2018 (currently 87000ish... max is 104000)
Group opex is $12 a barrel.
Overheads are $110m and I reckon capex of $300m max in 2018.

Using the hedge (38500 bopd at $51) and unhedged 56500bopd at say $60

Cash gross profit $1538m
Admin cost $110m
Capex $300m

Reduction in debt $1128m

New net debt for 31/12/2018 $2.3b ....no stress.
Farm out part of Kenya (no capex until after 2020) and all bank debt gone just leaving the bonds in place. (Bonds total $1.6b)

[mercer95] 24/11/2017 12:57

I bought some more, the bulk of Tullows debt was invested in the infrastructure/ production vessels (FBSO) cutting-edge technology, Tullow is all geared up to take advantage when oil reaches a pinch point, lack of general investment in developing new fields will start to factor in soon, this will take off big time

[nicebut] 24/11/2017 11:53

I see Odey increased short by .18%...others dropped a tad.

[nicebut] 24/11/2017 11:48

Only c20% of production hedged in `19

Also the hedge acts as a floor- though off course it costs to have the hedge in place. Though with 11-12% coming from insurance for `free`- somewhat offsets the hedge-which is great news.

Edit: Looks like someone just put in a large buy order

[frazboy] 24/11/2017 11:46

the hedges are insurance policies billionaire1, you know that.

[billionaire1] 24/11/2017 11:43

hedged at 47 for three years time
does nt auger well for future price of oil and profits

[frazboy] 24/11/2017 11:43

i was wondering about the company's hedging position Spirito - I figure it's pretty expensive to hedge, which is perhaps why the company's 2018 hedge are so out of the money (early 50s I think, as declared at 31st October) - the curve is also in backwardisation which doesn't help, the market is expecting lower prices in next year or two.

i'm expecting a mark up on the new RBL facility, and possibly a recovery to the previous trading range - the TLW share price is a bit volatile so I'm sure we'll get a bit of a ride, whatever happens!

[spirito] 24/11/2017 11:36

ignore the current share price the oil price is all that matters. at these prices we will be paying down debt at a increased speed with increased production income also. 6 months at these prices and worm will turn also this should give some higher hedging opps against future sales.

[mariopeter] 24/11/2017 11:32

I see Frazboy. I have not even found target field sizes...

[frazboy] 24/11/2017 11:08

mariopeter - RE: your post a couple of days back, i was actually looking for an evaluation of the pure exploration assets (not easy...), not the producing/appraisal assets - these can be valued from data in the public domain. your post was appreciated regardless, thanks

[mcsean2164] 24/11/2017 10:46

Thanks Frazboy,

That's useful information!

[frazboy] 24/11/2017 10:19

so, the 6% bonds are now fully recovered from last's week wobble, if you can even call it a wobble:



the equity is still down by ~15% tho, and EV down by ~6.5%, short positions appear to be relatively stable up about 0.8% on the low. it is fascinating to see that the driver for that change appears to have been the IEA report (more pessimistic long term forecast, as well as supply/demand balance over the next couple of quarters), and the short lived dip in the OP - I kinda thought these guys would be more independently minded. the real cause of the dip tho, is probably a reduction by the longs, no holding RNSs means it was a tweaking of positions, not a rampage for the exit.

[ifthecapfits] 24/11/2017 08:07

yeah we're up - not right.

[citytrader66] 23/11/2017 19:36

shorters day of today with US markets closed?

WTI still trading. its up, i think brent will be 68.50 in the morning, maybe higher. but where will share price be? nearly broke 175p today. 175.50 was high. some resistance still at 175 me thinks.

[mcsean2164] 23/11/2017 18:59

krammy1,

Humble apologies. Perhaps you might refresh my memory with the name of the 7th planet?

[krammy1] 23/11/2017 15:48

Mcsean2164. Don’t ask silly questions .

[spirito] 23/11/2017 15:06

he's looking forward to the age of ai and the robotz!

[mcsean2164] 23/11/2017 14:59

krammy1,

What if there was 6 planets?

[blueteam] 23/11/2017 14:57

200 to be tested again soon.