Tullow Oil Share Discussion Threads

[mcsean2164] 10/1/2018 11:10

mariopeter,

That's my understanding exactly.

Anyway, beside the hedging, good results and share price is holding. Getting back to the FTSE would be great and with the current POO, may happen sooner than we think.

[mcsean2164] 10/1/2018 11:10

mariopeter,

That's my understanding exactly.

Anyway, beside the hedging, good results and share price is holding. Getting back to the FTSE would be great and with the current POO, may happen sooner than we think.

[nicebut] 10/1/2018 10:16

This is where some of the growth and excitement should come from ,IMO.

Ghana drilling in 2018

Tullow has secured the Maersk Venturer rig which is expected to commence drilling in February 2018. The rig will be used across the TEN and Jubilee fields and has been contracted for up to four years with favourable early termination provisions. The first well planned is an Ntomme production well in the TEN fields followed by a Jubilee production well located in the north-eastern area of the field. Work is ongoing to finalise the sequence of further wells to optimise output from both the Jubilee and TEN fields. Tullow and its Joint Ventures Partners continue to evaluate the business case for contracting a second rig that would allow the acceleration of drilling on the TEN and Jubilee fields.

[lullabite] 10/1/2018 10:05

So lets say oil trades at 75 by the end of 2018 is tullow gonna be able to capture the upside ? How much 2018 And 2019 production is hedged at lower prices ?

[mariopeter] 10/1/2018 10:04

Yes hedging does secure the downside on the oil price but I don't think we will be using those hedges as they are too low leaving the premiums to be written off as a cost of sale.

[qs99] 10/1/2018 09:45

I agree leoneobull....remember how high this share has been rated before....as it pays its debt down the equity will shoot up IMO but depends on oil price sustaining this level so DYOR, but am in for the ride for 2018 as markets IMO always look 9-12 months into the future.....

[leoneobull] 10/1/2018 09:43

Isn't it a minimum floor price anyway? So we capture the upside...?

hxxps://thefundmanager.co.uk/uk-listed-stocks/tullow-oil-plc/

[xxnjr1] 10/1/2018 09:38

Hedging policy is probably insisted on by Tullow's banks, who are owed an awful lot of dosh. Ok, hedging looks bad now but 6 months or so ago the scenario was a lot more pessimistic.

I'd be tempted to hedge heavily at todays prices if I were TLW, but hey, who knows where the oil price is going?

[nicebut] 10/1/2018 09:35

They`ve been conservative which is good.

Besides, there is room for increased production:

`Tullow expects 2018 gross oil production from the TEN fields to average 64,000 bopd (net: 30,200 bopd). During the year, the rig schedule and timing of drilling and completion operations will be optimised, providing upside potential to this initial estimate.`

[mariopeter] 10/1/2018 09:35

The giant Kenyan oil fields are the "rescue". A higher oil price is a huge benefit for the shareholders. Projected oil production for 2018 is better conservative at the outset.

Anyway is $900m free cash-flow (after taking off 460m cap-ex) at $70 Brent not enough for you?

Hedging is a cost of sale.

[mcsean2164] 10/1/2018 09:27

xxjnr1,

Yes agree, Tullow don't seem to be capable of hedging (overly optimistic of pessimistic). Might be better if they took the market rate as a policy instead of spending on future predictions.

[frazboy] 10/1/2018 09:16

good post xxnjr1, i'm with you on those comments. it will take quite a while for that extra Capex to result in sustainted/extra production. i have FCF at a bit more than $500m next year plus the Ugandan stuff (assuming it happens). a bit surprised at the relative share price strength this morning.

[qs99] 10/1/2018 09:12

I think market may start to look 6-9 months down the line and price in these higher oil prices to TLW and debt reduction with value IMO switching back into equity. These were over £3 a year ago....DYOR but will be fascinating next week or so as management brief city etc and whether that story holds, or it will drift. Let's see

[xxnjr1] 10/1/2018 09:09

I was anticipating (more) production growth FY18 over FY17.

As it is FY18 oil production (inc insurance) forecast is down 86.4K vs 89.1K for 2017.

Then you have softer hedging for 2018 45,000 @ $52.23 vs 2017 42,500 @ $60.32.

And higher 2018 CAPEX $460m vs $250m.

So we need to be rescued by the oil price, Uganda deal completion & FID, and hopefully a partial TEN farm down.

[leoneobull] 10/1/2018 08:42

Watch the mms load up as sell on news brigade hand them a large number and then walk it back up later today on back of analysts' upgrades

[spirito] 10/1/2018 08:39

profit takers soon gone

[albanyvillas] 10/1/2018 08:36

This is going to 260p very soon imho

[ifthecapfits] 10/1/2018 08:20

Pretty damn good results all round.

[spirito] 10/1/2018 08:20

already happened

[teamwork1] 10/1/2018 08:18

Why not big rise in share price?

[mariopeter] 10/1/2018 08:13

Yes cracking production for 2017. Cap-ex 2018 restrained at 460m. Uganda cracking on ..all paid for.. Debt at 2.5 EBITAX at $70 Brent...Hurrah!

Brent is nearly $70 . Every $10 on a barrel is extra $300m fcf.

On projections FCF for 2018 at 90k Production and capex 460m at $60 Brent is $600m (incl 200m from Uganda)

[qs99] 10/1/2018 08:10

Forecasts from what I can see on oil, should only led to the interest in TLW given its operational leverage IMO....DYOR but am in for the 2018 ride GLA

[spirito] 10/1/2018 07:49

thus us the case. was checked a while and posted on here

[adg] 10/1/2018 07:31

Leon yes that is my understanding - they pay for the guarantee of the minimum floor price but any upside to floor price is kept - same for pmo

[leoneobull] 10/1/2018 07:28

Tlw apparently only needs to reach £3.10 to reenter the Ftse.