Tullow Oil Share Discussion Threads

[la forge] 13/7/2022 08:49

proactive


Jamie Ashcroft

08:33 Wed 13 Jul 2022


Tullow Oil maintains guidance, eyes progress in Capricorn merger

"The combined group will be well positioned to play a leading role in the African energy sector, delivering material value for all shareholders and our host nations," said CEO Rahul Dhir.


Tullow Oil PLC - Tullow Oil maintains guidance, eyes progress in Capricorn merger

Tullow Oil PLC (LSE:TLW) has retained its production guidance of 59,000 to 65,000 barrels of oil equivalent per day (boepd) for the full year ahead of its merger with Capricorn Energy.

In a trading statement issued ahead of interim results due for publication in September, the oil company said it generated some US$800mln of revenue in its first half, supported by a realised oil price of US$107 per barrel (averaging US$87 per barrel after hedging).

Free cash flow was neutral for the period, it said, whilst noting that full-year capital spending was US$150mln in the first half and is expected to amount to US$380mln for the full year.

Advancing the merger, Tullow told investors that it expects a shareholder vote towards the end of this year.

“The proposed merger with Capricorn is an important enabler for a new business plan of the combined group, leveraging the combined resources of both companies and underpinned in part by the accelerated implementation of these projects,” said chief executive Rahul Dhir.

“With a new business plan, pre-tax cost synergies of US$50mln per year, the opportunity to drive down cost of capital and further optimise capital allocation, the combined group will be well positioned to play a leading role in the African energy sector, delivering material value for all shareholders and our host nations.”

In terms of its operations, Tullow highlighted progress with the drill-bit in Ghana were seven new wells have been drilled since April 2021 – drilled on average at a cost of less than US$50mln per well.

Tullow added that the pace of drilling is expected to accelerate at the Jubilee field into the fourth quarter.

The company’s part-owned Jubilee field produced some 82,400 boepd over the first half whilst the TEN fields ran at 24,300 boepd – representing some 30,800 and 12,500 boepd respectively net to Tullow.

It noted that it saw strong uptime ratios at its floating production facilities, of 99% at TEN and 95% at Jubilee.

Elsewhere, in Gabon operations delivered increased production volumes by 6,000 boepd.

Across its non-operated producing assets in Gabon and Cote d’Ivoire, Tullow averaged 17,600 boepd.

Work continues to farm-out in Kenya and, in Guyana, exploration activities continue as partner Repsol is presently drilling the Beebei-Potaro prospect on Tullow’s 37.5% owned Kanuku Block.

“A relentless focus on costs, capital discipline and operating performance is ensuring delivery of our business plan,” Dhir added.

[xxnjr] 13/7/2022 08:48

Booty - How many companies in the E&P sector would exist today if they only gave guidance in the year of production FFS ?

Well I'll give you a bit of a talking too! that is the way TLW, KOS and GNPC have done it for the last 15 yrs or so! Pretty standard industry practise I'd say. Agree budgets in late Q4 (dependent on the then oil price, next years oil price forecast, recent reservoir performance and production, Currency Rates, Cash and a host of other factors) which determines work scope to be agreed by JV partners for following year enabling accurate production guidance.

So far you would have to say actual production is basically following the path Rahul set out when he took over. He's actually been pretty accurate. I do understand your frustration that output so far hasn't reached the higher levels you envisaged. Rahul said there will be a CMD ahead of the CNE Deal Prospectus. Something to look forward to. One or both TEN 'strategic' wells will be down by then so they will have a clearer understanding of the upside.

[bootycall] 13/7/2022 08:38

@Eircomnet
1) Depends if terms of deal are sweetened or not..in Capricorns favour as the current prices imply.
2) Depends on ability to refinance debt at lower rates based on a more risk diversified operating base (sovereign risk to Ghana lowered by Egypt and Kenyan production).
3) Depends if further costs can be wrangled from the Company post merger
4) Depends on the use of Capricorns balance sheet, to select high IRRs projects which would otherwise not go ahead. For example. If the second rig is employed earlier or for longer duration, we might add 20k of production by 2025 we would not have had otherwise.
Alternatively we might take a larger working interest in the Kenyan project than without the merger, or be able to support with front end capital a deal on the non associated gas opportunity in Ghana.

Although not strictly dilutive, the enlarged shareholder base post a transaction would provide greater liquidity and payment of dividends earlier ? might allow additional investment funds to invest and gain retail interest, particularly from income seekers.

The Capricorn deal is not without merit but we should have had clearly identified our significant upside before doing so. Listen to the webcast, Ten has the capacity to reach well in excess of 50K per day gross…the reserves are there…they have hardly been drilling any wells until recently ! Now show me an analyst which recognises what Rahul has indicated today in the forward production guidance. It’s pathetic .

[eircomnet] 13/7/2022 08:17

Booty, what amount of dilution for tlw shareholders do you envisage, I know that there
can be no certainty, just wondering.

[badger36] 13/7/2022 08:14

Capsized deal and falling market cap with debt/equity ratio off the radar. I see Tullow being forced to sell to any bidder as it simply cannot afford all the bluster. They suffer from small dog syndrome and will be like Icarus All hat and no cattle The Capricorn deal will be scuttled and Tullow will be picked off for a pittance

[bootycall] 13/7/2022 07:58

“Production guidance for 2023 will be provided in the 2023 Jan Trading Update (as always).”

@xxnjr There are a decent number of wells being drilled this year, which will be only be put on stream next year. Tullow would not be investing in the subsea infrastructure if there was any doubt about their ability to flow. How many companies in the E&P sector would exist today if they only gave guidance in the year of production FFS ?
Rahul, is about to dilute shareholders if the merger succeeds , without a proper understanding of the likely production profile for 2023/24. Rahul is only to happy to talk about 2025 production levels even though that might be achieved much earlier. Don’t get me wrong, Capricorn helps to derisk the balance sheet to a large extent and has identified significant cost savings….but we badly need a light shone under our bushel ! This man knows how to make an attractive proposition less attractive …lets put it that way.

[badger36] 13/7/2022 07:53

Advantage to shareholders of Tullow!!!Lost 25 percent in last few weeks We don't need that type of advantage

[grupo guitarlumber] 13/7/2022 07:51

Tullow Oil Keeps FY22 Production Guidance on Strong H1 Drilling

07/13/2022 | 07:26am BST


(MT Newswires) -- Tullow Oil (TLW.L, TQW.IR) maintained its full-year production guidance, saying output in the first half was in line with expectations.

The oil and gas explorer said Wednesday that drilling performance was strong across its portfolio and it expects to produce 59 to 65 thousand barrels of oil equivalent per day, including the incremental production from the successful pre-emption in Ghana.

Shares in the company were up slightly on Tuesday's close.

Price (GBP): £43.86, Change: £+0.20, Percent Change: +0.46%

[xxnjr] 13/7/2022 07:46

Booty - can you explain why Rahul needs a good talking to?.....

[xxnjr] 13/7/2022 07:40

Booty

I can help there:

Jubilee is producing at approx 92.5K at the moment but latest cargo loading today may suggest it has tailed off a bit in last 10 days.

Production guidance for 2023 will be provided in the 2023 Jan Trading Update (as always).

[xxnjr] 13/7/2022 07:33

As expected good operational progress with drilling efficiencies, FPSO uptime, and Jubilee production. No mention of approx net debt (unless I missed it) so presume it has gone up at end of half year which ends on 30th June (and not the first week of July in TLW's financially engineered FCF in balance calculation!). Weak financial performance + weak oil price today probably accounts for weak share price. Hedging gets better next year and maybe the CNE deal gets approved. Other than that it's all promises of jam tomorrow (Ghana Gas, TEN Upside and Kenya).

[bootycall] 13/7/2022 07:21

Where is the production profile guidance for 2023 ? Where is the accelerated drilling programme ? No mention of current level production performance at Jubilee which is amazing (100kbopd gross ?). The scheduled maintenance shutdown in the 1H has taken the shine off the average, but the second half should be very encouraging based on current run rate.
I think Rahul wants a good talking to.Mind you, if he pulls off a reasonable non associated gas contract in Ghana, we could have a bounce in the short term.
I expect many more positives in the conference call. Most of this announcement is rear view mirror stuff.

[the grumpy old men] 12/7/2022 06:04

Tullow Oil will publish a trading statement on July 13.

[fizzmiss] 11/7/2022 19:50

Like it or not, the share price is being worked lower and lower for personal agenda, and not in the interest of shareholders!

[waldron] 11/7/2022 07:19

Alfiex
11 Jul '22 - 08:15 - 57697 of 57697
0 0 0



Tullow Oil logo

Tullow Oil plc (OTCMKTS:TUWOY – Get Rating) – Analysts at Jefferies Financial Group raised their FY2022 earnings per share (EPS) estimates for shares of Tullow Oil in a report released on Friday, July 8th. Jefferies Financial Group analyst M. Wilson now anticipates that the energy company will post earnings per share of $0.19 for the year, up from their previous forecast of $0.17. The consensus estimate for Tullow Oil’s current full-year earnings is $0.13 per share. Jefferies Financial Group also issued estimates for Tullow Oil’s FY2023 earnings at $0.18 EPS, FY2024 earnings at $0.20 EPS and FY2025 earnings at $0.13 EPS.

[waldron] 11/7/2022 07:17

Alfiex
11 Jul '22 - 08:15 - 57697 of 57697
0 0 0



Tullow Oil logo

Tullow Oil plc (OTCMKTS:TUWOY – Get Rating) – Analysts at Jefferies Financial Group raised their FY2022 earnings per share (EPS) estimates for shares of Tullow Oil in a report released on Friday, July 8th. Jefferies Financial Group analyst M. Wilson now anticipates that the energy company will post earnings per share of $0.19 for the year, up from their previous forecast of $0.17. The consensus estimate for Tullow Oil’s current full-year earnings is $0.13 per share. Jefferies Financial Group also issued estimates for Tullow Oil’s FY2023 earnings at $0.18 EPS, FY2024 earnings at $0.20 EPS and FY2025 earnings at $0.13 EPS.

[alfiex] 11/7/2022 07:15

https://www.defenseworld.net/2022/07/11/fy2022-eps-estimates-for-tullow-oil-plc-increased-by-jefferies-financial-group-otcmktstuwoy.html