Tullow Oil Share Discussion Threads

[xxnjr] 02/1/2020 13:42

Well possibly bootycall. Will be pleasantly surprised if there's a bid, at all. But if there is, it certainly won't be as high as you suggest (IMO). With 1.4bn shares in issue, and c.$3bn of debt, a takeout price of £2, results in an enterprise value north of $6.5bn. Do you seriously think anyone would pay $6.5bn for the company?

As a reference point Total paid $8.8bn for:-

".....Algeria: 24.5% participating interest and operatorship of blocks 404a and 208 (Hassi Berkine, Ourhoud and El Merk fields) in the Berkine basin in which Total already owns 12.25%. These fields represented a gross production of 320 kboe/d in 2018.

Ghana: 27% participating interest in the Jubilee field and 19% participating interest in the TEN fields. These fields represented a gross production of 143 kb/d in 2018,

Mozambique: 26.5% participating interest and operatorship in Area 1 where a 12.8 million tonne per year LNG project is largely derisked and close to sanction. Area 1 contains more than 60 Tcf* of gas resources, of which 18 Tcf will be developed with the first two train project which is expected to come into production by 2024,

South Africa: exploration licences, close to Total’s recent Brulpadda discovery....."

*60TCF = 10 bn barrels of oil equivalent high value LNG resource.

So for $8.8bn you get

~80K bopd net production high value barrels in Algeria.

~27% Jubilee & 17% of TEN.

~ 2.65bn bbls net oil equivalent LNG discovered & fully appraised resource. (offtake agreements in place for >10mmtpa gross)

~ S.Afr expln at zero cost.

Since above deal value of Ghana has gone down arguably.
£2/share sounds great, but hardly seems realistic (IMO).

I reckon there will be a fire sale of assets here, leaving Tullow to slog it's way back to a more sustainable debt level over say 3 to 5 yrs. Why buy the whole shebang when you can just pick up the pieces you really want at knockdown prices?

Hope you are right though!

[mariopeter] 02/1/2020 13:23

Don't really know Sentiment but London would be great in double listings. Just assuming African governments will insist on local involvement.

[sentimentrules] 02/1/2020 13:18

Mario I don't know the checks for listing on those exchanges. Easy get on them ?

[mariopeter] 02/1/2020 13:15

So no quick fixes from Guyana. That is a Tullow-commissioned rig in Guyana.

Looks like a tough and long fight back by the Company may be on the cards. Two huge non performing assets where capital is needed to get them going and perhaps subsidiary floats on African exchanges will do the job.

Big risks maybe big gains. Don't for one minute think their lending criteria has not changed. Debt to equity ratios since the warning RNS are now flagging deep red and likely within bank covenants.

Needs a great conductor for starters.

When you do dig your trench make sure you are planning for 2/3 years to match the lower production forecasts from Ghana. Hedging will be more and more forced onto the Company so the impact of the oil price will be dampened.

I see it range bound at lower levels until the new CEO can offload some debt and repair the stab wounds..... no shi* Sherlock...

[sentimentrules] 02/1/2020 13:11

In fairness for now.. was never the shorters recently. Just pessimistic bulls. Short interest low albeit Blackrock coming out from under the radar on December 18th will encourage them to look more

[sentimentrules] 02/1/2020 13:09

Maybe waiting a good strategy and placement

If it's going to be investable. . Be a good time

Placements are very cruel though. Forcing current holders to buy more. So hope for a good strategy with it if comes

[wodahsnoom] 02/1/2020 13:06

Very little priced into tlw because of lack of trust and possible continued unexpected bad news. Big boys will wait for official announcements before committing money to tlw shares

[crossing_the_rubicon] 02/1/2020 12:39

Article dated 2nd December - surely already priced in????

[bootycall] 02/1/2020 12:38

No time for a lengthy post. Let me summarise.

This is a non commercial discovery. Exxon have drilled most of their best wells at the bottom of slopes not the top. To find oil at the right API proves oil migration...well done Angus McCoss....now to recalibrate and reprocess the seismic to identify the right drilling locations....just like Tullow had to recalibrate seismic in Uganda before drilling with a great success rate. Tullow has in my opinion proved more with this well than Apache, who have just farmed out on great terms to Total in adjacent block. Because of investor sentiment and general lack of interest in junior E&P i think Tullow management will want to show investors the tremendous value of these blocks in the upper and lower Cretaceous by reducing their 60% interest in Orinduik for a 3 well programme and development carry later this year. The majors will likely be queuing up around the corner.
Meanwhile private equity are relishing buying a PLC with a financing cost of $9 per barrel which can be absorbed into an SPV which can leverage up on half the implied debt financing cost. I have upgraded my conservative break value of Tullow to over £2 assuming $60 oil..although if a bid comes before the seismic is reprocessed, i suspect £1.50 might be a take out price. In view of market sentiment there is no guarantee that the share price will rise much from these levels until the Government of Ghana (which has caused most of this Horlicks when it failed to take its free gas allocation form Jubilee)announces revised gas off take agreements which will give investors confidence in restoring field production. Institutional investor sentiment is horrible in the sector but cash flow yields is what the big private equity boys are interested in. My only concern now is when will they make their move ? and can the Tullow management mount a decent defence short term ? Good luck and do not rely on any of these opinions when making an investment decision.

[wildsheroo] 02/1/2020 12:31

It's dated 2nd of December 2019.

[leoneobull] 02/1/2020 12:18

I'd be delighted if we get an update on Uganda now that the tax issue has been put to bed and FFD on the way. Kerching

[sentimentrules] 02/1/2020 12:16

Didn't slander anyone. Shared a view on tullow

You only take it as slanderous because you deem it a personal attack on your market intellect

Nope

It's a bear view on tullow only

[sentimentrules] 02/1/2020 12:15

Everyone gets what they deserve in markets my friend. And I have done very well for 20 years

My attitude is very simple.

If it's a buy, buy it. If it's a short, short/sell it. If unsure, walk away

Of course what I say won't affect share price The evidence is recent crash with rampant bulls posting.

As for investment re bet..

Of course it's a bet. Call it investment if you will but ultimately it's a bet on your own analysis

[leoneobull] 02/1/2020 12:03

The good Dr in Africa took a 7% stake. Who else will be in for more?

[sentimentrules] 02/1/2020 12:01

Leone reminds me of when you said that HUR 51p

I didn't look. How did I do short?

[sentimentrules] 02/1/2020 12:01

Nothing to get emotional about lads. It's only a bet. Same as the buyers

[leoneobull] 02/1/2020 12:01

Counterfactual indicator. SR shorts. LONGS go in big time

[sentimentrules] 02/1/2020 11:59

Ie short target share price 21p

[leoneobull] 02/1/2020 11:59

Topped up again. I am putting faith in management to address Ghana gas issues to boost production

[sentimentrules] 02/1/2020 11:57

80p exit a loss. @21p . If market says exit at share price 21p, exit 38p up. Not a great ratio. But not big money. Only £6000 risk

[maturo] 02/1/2020 11:52

ref. Il exit 80p though.

so you mean a 21p lost - sentiment - being a short
not a 21p profit

[sentimentrules] 02/1/2020 11:51

I am invested. OK in it's demise but it's the same as a buy

Money in to target return

[teamwork1] 02/1/2020 11:49

Two very important updates 15 Jan and feb. I think everyone should keep the opinion to yourself. Like myself I'm losing alot of money. If you not going to invest then don't put your noise were it doesn't belong.