Tullow Oil Share Discussion Threads

[mcsean2164] 26/4/2018 14:17

Thanks for the report Deans,

Any news on Kenya, is there any production there or anything planned?

[deans] 26/4/2018 11:36

Nothing more I can recall to the info given in yesterday's AGM statement. I think they are looking forward to getting on with new exploration work but the immediate priority is to sustain production at Jubilee and increase production at Ten to increase cash flow and reduce net debt.

[ifthecapfits] 26/4/2018 07:35

Was there anything on the upcoming Namibia drill?

[deans] 26/4/2018 06:08

Attended the AGM not sure there is much to add to yesterday's AGM RNS statement. The company was happy with 1/q/18 production against the corresponding last year. Getting net debt down v EBITA towards x2 which where they think is right for an E&P company like TLW, with the current 2.5x a much better position than they/we were a year ago pre RI.

This year production still guided at slightly less than last years but looking to get it back and above 2017 in following years based on the good start to this year and the in fill drilling planned plus increasing Ten production.

Anybody else attend? Happy to answer any questions if I can.

[oilretire] 26/4/2018 06:01

So the 4th annual oil & gas convention is ongoing in Uganda. Seems they'll be offering up more explo licences for 2019.

Should bode well for a smooth conclusion to the current farm out process you would think? Especially if they want to attract lots of competition for the new licencing round.....

[oilretire] 25/4/2018 23:13

.....Wood Group Kenny, based in Aberdeen, Scotland, will undertake the Front End Engineering Design (Feed), which entails feasibility studies and an initial design, for the more than 890-kilometre pipeline.....

.......Wood Group was selected from a pool of eight companies that had been pre-qualified and were in December last year invited to bid for the job. Sources at the Ministry of Petroleum said the firm is expected to start work immediately. State Department of Petroleum Principal Secretary Andrew Kamau said at a past event that the Feed process would take about eight months. “The contract will be awarded by end of April. It will take the contractor between eight and nine months to complete the Feed,” he said. Construction of the pipeline is expected to start in 2019 and take two years to complete, in time for the first phase of commercial oil production - which Tullow Oil has said will start in 2021 or 2022.

[frazboy] 25/4/2018 18:43

and i'll correct my previous post, the Interest Rate on the bond is 7%, not 8%

[nicebut] 25/4/2018 17:31

Agree with that...

It was in last years too.. I`ll delete the post above.I should have looked back before I posted.

[frazboy] 25/4/2018 17:24

i think that's frequently included in AGM resolutions but rarely acted on unless it's been very well broadcast in results announcements. When you have $3.4 bn of debt some of which is at 8% (edit: 7%) there's better things to do with your money...

[nicebut] 25/4/2018 14:48

From the full year results...TLW seem happy- All going in the right direction. debt down $100m...Gearing is nearer to where they want it with good cash headroom. With PoO going up, that position surely is improving further?

`As of year-end 2017, Tullow has total headroom including free cash of $1.1 billion with no material near-term debt maturities, and net debt of $3.5 billion.

During 2017, the Group's net debt to adjusted EBITDAX gearing ratio has reduced from 5.1x to 2.6x. This reduction has been driven by increased adjusted EBITDAX generated by the business of $1,346 million compared to $941 million in 2016 and lower net debt as a result of the significant free cash flow generated in 2017 and the $721m net proceeds from the Rights Issue. This takes Tullow close to its target gearing position of below 2.5x.`

[lonrho] 25/4/2018 13:16

frazboy

Thats assuming they didnt massage the year end debt by for instance holding back on paying creditors.

[frazboy] 25/4/2018 12:46

xxnjr - so, as you said, debt was $3471m at YE, and is now '$3400' +/- $50m. I've assumed an average price of $65 this year (it was $67 for the first 3 months, so that's an okay assumption for this exercise), giving a FCF of $550m for 2018 (prior to Uganda FO etc), so a debt reduction of say $140m in Q1 would be expected? So, yes, debt at the end of Q1 is perhaps $50m greater than we might have anticipated.

[craigo121] 25/4/2018 12:00

You forgot !
To say just how much debt they still owe

[nicebut] 25/4/2018 11:41

Jubilee is disappointing mainly due the turret problems. When the final fix is done later this year the production will be increasing with the extra production wells
With rising PoO coinciding with the drilling at TEN and then Jubilee then the cash cow is timed nicely to get a bit larger IMO....


`Drilling
The Maersk Venturer drill rig has arrived in Ghana and began operations in the field on 9 March 2018. The rig is expected to drill and complete four wells in 2018. The first well is a Ntomme production well at TEN which is progressing as planned and is expected to be brought on stream around the middle of the year. The second well planned is a Jubilee production well located in the north- eastern area of the field. Work is ongoing to finalise the sequence of further wells to maximise production 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 across both fields.`

[frazboy] 25/4/2018 09:51

xxnjr - i doubt Jubilee will see much above 100-110k again, or at least not for a sustained period - it's on the slide, but the infill drilling (when it starts) should help keep it above current rates. i was making the point that Jubilee production was a bit disappointing, although how disappointing is difficult to quantify due to the shut-in and, presumably, the gradual build-up (that's the difficult to quantify bit) after the shut-in. Jubilee (and TEN) are the cash cows that are required to pay down the debt pile, i'll need to go back to my spreadsheet, and see what i was expecting debt to be at this point, but my knee reaction was... lower! however, as you point out there's probably been a bit of refinancing fees etc.

[sux_2bu] 25/4/2018 09:23

Waiting for sub 200p :-)

[supermarky] 25/4/2018 09:04

Tlw is always such an erratic character

[mariopeter] 25/4/2018 08:55

Fair comment Fraz. Need to drill Jubilee as well as fix the fpso but all in budget for 2018. Current max tullow production would be around 100000 bopd ish net so some room.

[xxnjr1] 25/4/2018 08:43

Frazboy - Jubilee FPSO used to be capable of about 115 to 125K excluding downtime in it's earlier days. It's rated at 125K iirc. Quite a few years ago, McDade was touting the notion that they could get it up to 145K with a bit of serious de-bottlenecking. Since then, they've been firefighting on various fronts just to get the paltry output numbers we've seen over the years. FPSO was converted VLCC by MODEC (good) but they've either been unlucky or are not the best of operators. Whether Tullow as operator can get it back up to 120K remains to be seen.

[nicebut] 25/4/2018 08:40

So is there a gap at 2.35p now?

[frazboy] 25/4/2018 08:32

mariopeter - so non-operated WA the production highlight? And Jubilee a bit off, fair comment?

[ifthecapfits] 25/4/2018 08:25

Does anyone now what the CoS of upcoming Namibia drill is? Also details of the 3D would be good - if made available.

[teamwork1] 25/4/2018 08:19

It should recover by the end of play today