Tullow Oil Share Discussion Threads

[bootycall] 30/5/2018 08:54

xxnjr1. It is my understanding that the original allocation of 200 bcf of associated gas from Tullow was the only way the Ghanaians could achieve the project economics to get the Chinese interested in building the infrastructure. Owing to the usual environmental reasons, Ghana has a "no flaring" policy. Many E&Ps in Africa are of course railroaded into making uncommercial agreements to begin with. What is important is that the gas infrastructure is hooked up to both Ten and Jubilee and I have been advised that the 200 bcf commitment to the project financing will have been met over the next 24 months (after which time I would be surprised if Tullow had not secured more normalised pricing in its GSA).
Despite ENI having larger quantities of proven gas reserves, there is significant unmet demand for gas in Ghana and nearby Ivory Coast.

[xxnjr1] 30/5/2018 00:41

Bootycall - Thanks for the information on Sankofa gas prices achieved by ENI which seem quite reasonable. GNGC are prioritising Gas to Power projects, where gas is supplanting existing oil or diesel powered electricity generation. Looks like a win-win outcome for both parties. Ghana gets cheaper electricity and contractor supplying gas gets a decent price. Let's hope Tullow are getting a similar value for TEN gas production. Given the pricing achieved by ENI, one might ask: why on earth are Tullow giving away 200bcf of Jubilee gas reserves for free?!!! :-)

It's difficult to guesstimate how much of the 200 Jgas has been delivered to date. Slide 11 shows gross remaining reserves @ 30/6/16 of 456bcf out of ultimate reserves of 491bcf. So that's about 35bcf produced over the first 18 months.

Historically TLW has produced about 1 to 1.5 bcf of gas per year out of WAfr, which ISTR comes from Cote d'Ivoire or EG. Looking at the Annual Reports - O&G Reserves Statements, we then have WAfr gas production in bcf increasing as follows:-

2013 3.0
2014 2.7
2015 17.4
2016 15.9
2017 14.1

Total 53.1

I kind of thought that might be Jubilee gas showing up (even though it has no value) - but on TLW's Map "WAfr" now includes the North Sea. hmmm - I'm none the wiser.

[jimarilo] 29/5/2018 20:14

Eco waiting for clearance to drill cooper PEL30 Namibia. They applied last November

Still no word from Char regarding a rig contract, I wonder if Eco & Tullow will take the slot after Cormorant if clearance arrives in time ?

[nicebut] 29/5/2018 13:11

Short term, no. Medium term maybe. Long term it will be a great deal higher but perhaps after visiting 220...?! IMO etc

[teamwork1] 29/5/2018 13:03

Do you guys think this will drop to 2.20

[mariopeter] 29/5/2018 10:48

Trading update in June and interim results in July. Dividend ? Feel net debt will be cc 3.2b and if Uganda clearance comes in then around 3b.So far the bull run in oil is still in tact. Upward trend line unbroken.US oil inventory figures will be big ahead of the driving season. Keeping an eye on US weekly production as rate of growth was falling fast recently.

[xxnjr1] 28/5/2018 21:34

Time to put the spinnaker up!

[n73] 28/5/2018 17:32

Today markets in USA and UK are closed. If Japan , Hong Kong and Singapore were closed I'd be a sailor.

[sux_2bu] 25/5/2018 17:22

www.ft.com/content/e1937e1c-6000-11e8-ad91-e01af256df68

[nicebut] 25/5/2018 16:07

There`s a tropical Storm forming in the Caribbean- So reckon PoO will bounce at some point!!

[nicebut] 25/5/2018 15:57

Just bought 5 for Tuesdays bounce!!! LOL

[ny boy] 25/5/2018 15:38

Support @ 237p and below that 200p, interesting to see where this closes today

[mariopeter] 25/5/2018 14:33

Thanks for the link xx.

[xxnjr1] 25/5/2018 14:17

bootycall - thank you very much for the information on Ghana gas pricing etc. I'm off out for a long weekend. Will have a look at this when I get back.

[xxnjr1] 25/5/2018 14:03

WTI currently about $70.20.
Next support at $70 approx.
The guys at CME Group usually do a daily video commentary on energy markets, which I've found useful. There's a range of opinions on offer from different traders. With a bit of luck this link will get you to the right place

[frazboy] 25/5/2018 13:24

Goo call on the short n73, although I think your short was more long term?

[n73] 25/5/2018 13:23

18% price withdrawal in 4 days.Who is doing spring cleaning of their portfolio?

[nicebut] 25/5/2018 10:57

Interesting how the Oil Co`s have led PoO lower....Has there been that link before? I guess the mini bubble has burst...

How low does PoO go? Chartwise?

[teamwork1] 25/5/2018 10:37

I was making a good profit at 2.79 and didn't sell. And sold this morning with small profit. Hope to get back in when it drops.

[sux_2bu] 25/5/2018 10:25

The price will continue to lower support, with a bit over shoot, say 2.20p.Plenty of bounces on the way. Rsi vertical.

[fraserdean] 25/5/2018 09:17

Also in W Afr non-operated Tullow in cote d'ivoire espoir CNR as operator. CNR describe the area as their most profitable oil production globally. They are drilling infill wells at baobab this year but will then start infill at espoir early next year for cheap extra production.

every little helps

[bootycall] 25/5/2018 08:53

xxnjr1

Really appreciate your post. Wish there were more like it !
I read that Jubilee compression capability would allow production to reach 150 mmscfd of associated gas. Target production level for JUBILEE was 120,000bbl/oil per day and associated gas of 120mmscfd. Around 20mmscfd are used to power the FPSO and another 30 for injection to enhance oil recovery. The remaining 70 units can be brought offshore. Owing to turret issues which has reduced short term production your figure of 60 seems very reasonable.
In Q4 2017 it was reported that Tullow had signed the Ten associated gas sales agreement with the government and will start supply during Jubilee scheduled maintenance shutdown in late May, with gas sales for the year equivalent to 4,200 boe/d. Looks like gas monetisation is becoming a reality.

As regards your question about historic gas production levels you will find the the Ghanaian gas production chart on page 23 (see attachment below) very useful in making calculations.

hxxp://www.energynet.co.uk/webfm_send/2765

Your speculation regarding Total is very much along the lines I am thinking. Any deferral of FPSO abandonment costs would create significant uplifts to project NPVs.

ENIs $7bn Sankofa Gas Project is a game changer for the Ghanas gas production, forecast stabilised production of between 171mscf and 210 mscf of non associated gas per day for the next 13 years. First gas is expected this quarter and an initial price of $9.8/mmbtu (reducing to $8.15 if opex costs come in lower)

Now that all the pipeline infrastructure is in place in Ten and Jubilee, Tullow will be able to monetise its non associated gas production potential quickly.

Lastly, when Energy Africa acquired its back in rights to Gabon acreage in 1997 they covered about 28 exploration and production blocks so I am sure there must still be a few tasty morsels to pick of. I remember that Tullow has historically achieved very attractive paybacks by participating in non operated West African production.

[wookie77] 25/5/2018 08:44

was hoping for a pull back to 240p but thought it was too obvious. Bought in for the first time in about 4 years! Good entry point IMO