Tullow Oil Share Discussion Threads

[whatsthepoint] 28/4/2020 10:26

Nice bounce in oil maybe time shorts to start bigger covering.

[ariane] 28/4/2020 09:39

Uganda’s Lake Albert oil project still far from certain, despite Tullow sale

Oil & GasUpstreamInvestment

By Andrew Fawthrop 28 Apr 2020

Industry-wide budget cuts and FID deferrals mean Tullow Oil's Lake Albert stake sale is unlikely to accelerate development of the maiden Uganda oil venture, says an analyst.
Lake Albert Uganda Tullow Oil Twitter

Tullow Oil agreed to sell its stake in Uganda's maiden oil development to Total for $575m (Credit: Twitter/Tullow Oil)

The Lake Albert oil project in Uganda is “highly unlikely” to receive a final investment decision (FID) before the end of this year, despite last week’s agreement by Tullow Oil to sell its stake in the venture to Total.

The unfolding oil market crisis, tax disputes with Ugandan authorities and local infrastructure limitations all present significant hurdles for the east African country’s first oil development to overcome, according to GlobalData’s upstream oil and gas analyst Conor Ward.

Last week, a deal was struck for UK-based Tullow to offload its interest in the Lake Albert project, including the proposed East African Crude Oil Pipeline (EACOP) to French major Total for $575m, subject to shareholder approval.

Ward said: “It is still expected that Uganda is unlikely to see first oil for a number of years as final FID has already seen multiple delays.

“A major step has been taken toward the settlement of disputes in Uganda, however as this agreement is only ‘in principle’ it could be some time before a full agreement is reached.

“With the current oil price environment and the Covid-19 outbreak, all project participants have reduced capital expenditure budgets, so it still remains highly unlikely that we see FID for these Ugandan projects this year.”


Lake Albert oil project in Uganda has been troubled by local infrastructure issues

Tullow Oil had been working in a partnership agreement with Total and China National Offshore Oil Corporation (CNOOC) to develop the Lake Albert project, which is estimated to be able to produce up to 260,000 barrels of oil per day (bpd) once fully operational from an expected total reserve of 1.7 billion barrels of oil.

But infrastructure limitations in Uganda have contributed to delays in getting the country’s maiden oil venture up and running – with the logistics of developing a near-1.5mk-long oil pipeline proving particularly problematic.

Ward added: “There were multiple delays to the associated multi-billion-dollar pipeline project — firstly due to disagreements with the construction route, and recently Total decided to suspend all works after termination of the farm-down agreement with Tullow.

“The country’s lack of infrastructure still poses as a significant hurdle — the necessity for a new-build 1,445km pipeline requires significant investment before production can commence.

“The pipeline is estimated to add around $3.5bn to the project. Total has said that it will look to drive down costs, which will be of utmost importance in the current economic climate as we estimate the break-even price to be more than $40 per barrel.”


Uganda sale brings welcome funds to struggling Tullow Oil

The $575m sale price – $75m of which is contingent on an FID being made – represents a significant discount to the $900m figure that was touted for a previously-agreed sale to Total, but which fell through last year following a protracted tax dispute with the Ugandan government.

Offloading its 33% share in the venture will alleviate some of the financial pressure on the Africa-focused oil producer, which has experienced a difficult time recently with a poor run of operational performances damaging both its balance sheet and investor confidence.

Tullow’s executive chairwoman Dorothy Thompson said: “This deal is important for Tullow and forms the first step of our programme of portfolio management. It represents an excellent start towards our previously-announced target of raising in excess of $1bn to strengthen the balance sheet and secure a more conservative capital structure.”

The firm’s financial struggles have been compounded by the onset of coronavirus this year, which has sent oil markets into meltdown with record-low levels of global demand and commodity prices in freefall.

Oil producers across the board have made deep capital spending cuts in a bid to weather the storm, with Tullow itself revising down its spending plans for the year by more than 30% to $300m.

Africa has been identified as a region likely to be heavily impacted by the financial prudence being exercised by oil companies, with many key projects dependent on a breakeven crude oil price of more than $45 per barrel – a far cry from the current value of benchmark commodity Brent crude, which is currently trading below $20 per barrel.

FID deferrals are expected to be widespread across the continent, with analysts forecasting up to $10bn in capital spending being wiped out across Africa’s upstream activities this year alone.

[letmepass] 28/4/2020 09:01

Gap filled to 20p. Nice

[the canadian mounted] 28/4/2020 08:54

Not you fartie6 you’re on benefits

[smartie6] 28/4/2020 08:50

Ha ha ha.
I really like watching a number of dreamers on here squirm. Should I repeat all the ludicrous posts from a number of you from last thursday morning? Man, it’s like watching mug punters in a bookies with their horse 10lengths clear at the last only to fall. Lol.

[the canadian mounted] 28/4/2020 08:46

Yes I forgot to thank the shorters for giving me the opportunity to double my money 👍🏽

[whatsthepoint] 28/4/2020 08:37

Shorts are still controlling the trading activity here.

[the canadian mounted] 28/4/2020 08:35

Fartie6 you’re on benefits anyway

[smartie6] 28/4/2020 08:34

I’m going to repeat what the mounted Canadian said above when this thing goes bust.

[the canadian mounted] 28/4/2020 08:28

I’m quite happy to hold,inexperienced
Investors showing their impatience
This isn’t a day trade,maybe a lot on here would be better keeping it in the bank!

[marmar80] 28/4/2020 08:18

Matter of hours imo

[sbb1x] 28/4/2020 08:17

Aa cant break 25p

[marmar80] 28/4/2020 08:17

AA should do 30% for you if you take a risk, see the graph

[sbb1x] 28/4/2020 08:16

Nothing garbage about this stock.You just have to trade the swings.This and oil will have more swings than your local park.7p - 29p.29p - 15p15p -35p35p - 20p20p - mid 30s ?

[badger36] 28/4/2020 08:14

Should have sold over 30. What a complete garbage stock

[sbb1x] 28/4/2020 08:10

The 20p gap fill was always gonna happen everyman and his dog knew it.

[sbb1x] 28/4/2020 08:08

Time to buy me thinks .Just ordered the sweet popcorn

[smartie6] 28/4/2020 08:04

20p now mounted Canadian. WTF, isnt that how it closed on Wednesday night. Sheeeeeeeeet.
7-0.

[smartie6] 28/4/2020 07:56

This drivel made money with this stock from 56p to 7p, and from 32p to 26p Thursday.
Can you say the same?

[smartie6] 28/4/2020 07:53

I take it from the last comment that the mounted Canadian is more than worried what is going on and now takes these statements with a pinch of salt?
The one key question you should be asking is with everything you’ve seen over the last 24months, does this company look like and smell like a winner?

[jailbird] 28/4/2020 07:45

That would not surprise me and would not rule it out Co is doing it best to raise funds through sell of recent asset but will it be enough ?If it goes sub 20p.. warning signs may be there that not all is as rosy as we think .. that includes me

[whatsthepoint] 28/4/2020 07:40

It might be 6-0 to the shorts at this price but how many goals do you concede in buying back over 150 million shares. What is the length of the game. And that's about all it is to Shorters a game !!!