Tullow Oil Share Discussion Threads

[franky15] 23/8/2022 21:10

53p tomorrow

[mcsean2164] 23/8/2022 13:40

I hope you're right and he has something more than incompetence up his sleeve

[zingaro] 23/8/2022 12:29

Maybe Rahul knows that the vote is a long way off and also knows that before then TLW will have released improved performance eg @ half-year results.

[mcsean2164] 23/8/2022 11:35

I wish they'd walk from the stupid deal. CNE share price would crater and all the short termers would be begging for the deal to happen. We'd probably get a much better offer then. Bear in mind tullows assets increase in value while CNE money is inflated away.

The worst thing is the management shower are incapable of issuing a good sub 10% bond deal and incapable of paying down debt. It's just incredible how badly run tullow seems to be.

My fear is that Rahul will improve his offer for CNE and shaft us further. That's what the share price seems to be signaling.

[xxnjr] 23/8/2022 09:28

"Dhir put resistance to the deal from Capricorn shareholders down to risk arbitrage, where investors would push for the offer to rise after buying in post-announcement."

The problem is these new short term holders get to vote. Once they get their 'arbitrage' they will be long gone, descending onto their next victim.

Kenya could change perceptions. I presume the CMD charm offensive is waiting for that to fall into place?

[badger36] 23/8/2022 08:58

Exactly as we thought. Dhir is desperate and no doubt the refinancing deal was expensive. What on earth would make anyone believe Tullow's assets are worth taking a risk on. The hype we had prior to the exit of Tullow top brass, sulphur and water ...75% of Capricorn necessaryDeal has not got a snowballs chance in hell

[adrian j boris] 23/8/2022 08:27

subsurface
23 Aug '22 - 09:13 - 57897 of 57898
0 0 0
Benefits of Capricorn merger 'blindingly obvious', says Tullow CEO



Tullow Oil (TLW) has a new motto that includes the line “every dollar counts”.

This is something it can share with those pushing back against its merger with Capricorn Energy (CNE). The mechanics of the all-share deal are simple: Tullow provides the production assets and growth prospects, while Capricorn provides its estimated net cash position of $800mn (£673mn) at the end of this year, as per investment bank Stifel. Capricorn’s board said the 47/53 split in the new company was the best it could do.

The all-share offer equates to 210p a share for Capricorn, below the recent weeks' trading level of over 230p.

The pushback from the company’s shareholders has been vociferous, however.

The former Cairn Energy is a merger target after its payout from the Indian government for appropriating its former subsidiary Cairn India.

After years of court battles, India paid the company $1bn and it is left with a similar cash position even after paying a dividend of $500mn. At the same time, the company has shifted its focus to former Shell (SHEL) assets in Egypt, and cash profits are set to climb significantly this year and next. But it faces questions over strategy, largely around what to do with the cash and where growth will come from in the future.

Tullow says it answers those questions by supplying the assets and expansion prospects. The plan for the combined company is to hit 120,000 barrels of oil per day (boepd) by 2025 and have an annual dividend minimum of $60mn.

In an interview at Tullow’s West London headquarters last week, its chief executive Rahul Dhir said opposition to the deal came from a lack of understanding of the benefits. “Once people have [more information] they can objectively assess the combined business plan, pay attention to the synergies and recognise the very unique strategic position of the company, then [the rationale] becomes blindingly obvious,” he said. The company will hold a capital markets day in coming months to further lay out the merger plan.

Dhir said Tullow already had a “unique asset base that had been significantly underinvested”, and with further growth within reach if the significant debt servicing needs disappear. He pointed to successes this year in increasing production from offshore assets in Ghana as evidence that existing projects have more to give. First-half net production at the Jubilee field was 31,000boepd, compared with 25,000boepd a year ago.

Those capital constraints come from the company’s massive debt pile. At the end of 2019, debt covenants and disappointing production levels coupled with a weak oil price meant it came close to insolvency. A refinancing in 2021 reduced the risk by pushing out debt maturities and since then the higher oil prices have put it on a sounder footing, but total debt remains significant at $2.5bn, as per a July trading update.

The merger is grinding along – a shareholder vote won’t be until the end of the year, and the prospectus are yet to land.

Dhir put resistance to the deal from Capricorn shareholders down to risk arbitrage, where investors would push for the offer to rise after buying in post-announcement.

But since June, large Capricorn investors have been clear: no deal.

“The simple fact is, we don’t want Tullow paper,” Jamie Sherman, co-chief investment officer at Kite Flag Investment Manager, told Investors' Chronicle. His fund holds 6.7 per cent of Capricorn through cash-settled derivatives. “[Tullow] is high risk and highly-levered,̶1; he added. "This is effectively like a magic bean story, trading our dollars today for the promise of something in the future."

Legal and General Investment Management (LGIM) and Palliser Capital have also come out against the deal. Palliser and Sherman both said investors could simply buy Tullow shares if they wanted exposure, while the Kite Lake co-CIO said the bigger company could simply raise cash through an equity issue if shareholders were happy to see their stakes diluted.

Sherman said Capricorn should launch a strategic review to gauge third-party buyer interest, and if that does not bear fruit, then "return the bulk of the cash to shareholders" from both the India award and 2023 contingent payments from North Sea and Senegal divestments, while focusing operationally on the Egyptian assets it bought last year.

Tullow has an easier threshold to pass with the shareholder vote, with a simple majority, while Capricorn needs 75 per cent support to get the deal through. When the merger was announced, Capricorn chief executive Simon Thompson said it would “allow the two companies to accelerate investment in new opportunities across the continent, while retaining a resilient balance sheet and delivering attractive returns to shareholders”.

Stifel analyst Chris Wheaton, another sceptic, puts Capricorn’s net asset value (NAV) at 271p a share. He increased this in June based on contingency payments Capricorn will likely receive for the Senegal asset(s) it sold to Woodside Energy (WDS) in 2019.

Other analysts, covering Tullow, see the deal more favourably. The combination “makes sense strategically for the combined scale it brings in this production-led E&P era”, said Mark Wilson at investment bank Jefferies.

[franky15] 23/8/2022 08:17

This share is getting onmy nerves

[subsurface] 23/8/2022 08:13

Benefits of Capricorn merger 'blindingly obvious', says Tullow CEO



Tullow Oil (TLW) has a new motto that includes the line “every dollar counts”.

This is something it can share with those pushing back against its merger with Capricorn Energy (CNE). The mechanics of the all-share deal are simple: Tullow provides the production assets and growth prospects, while Capricorn provides its estimated net cash position of $800mn (£673mn) at the end of this year, as per investment bank Stifel. Capricorn’s board said the 47/53 split in the new company was the best it could do.

The all-share offer equates to 210p a share for Capricorn, below the recent weeks' trading level of over 230p.

The pushback from the company’s shareholders has been vociferous, however.

The former Cairn Energy is a merger target after its payout from the Indian government for appropriating its former subsidiary Cairn India.

After years of court battles, India paid the company $1bn and it is left with a similar cash position even after paying a dividend of $500mn. At the same time, the company has shifted its focus to former Shell (SHEL) assets in Egypt, and cash profits are set to climb significantly this year and next. But it faces questions over strategy, largely around what to do with the cash and where growth will come from in the future.

Tullow says it answers those questions by supplying the assets and expansion prospects. The plan for the combined company is to hit 120,000 barrels of oil per day (boepd) by 2025 and have an annual dividend minimum of $60mn.

In an interview at Tullow’s West London headquarters last week, its chief executive Rahul Dhir said opposition to the deal came from a lack of understanding of the benefits. “Once people have [more information] they can objectively assess the combined business plan, pay attention to the synergies and recognise the very unique strategic position of the company, then [the rationale] becomes blindingly obvious,” he said. The company will hold a capital markets day in coming months to further lay out the merger plan.

Dhir said Tullow already had a “unique asset base that had been significantly underinvested”, and with further growth within reach if the significant debt servicing needs disappear. He pointed to successes this year in increasing production from offshore assets in Ghana as evidence that existing projects have more to give. First-half net production at the Jubilee field was 31,000boepd, compared with 25,000boepd a year ago.

Those capital constraints come from the company’s massive debt pile. At the end of 2019, debt covenants and disappointing production levels coupled with a weak oil price meant it came close to insolvency. A refinancing in 2021 reduced the risk by pushing out debt maturities and since then the higher oil prices have put it on a sounder footing, but total debt remains significant at $2.5bn, as per a July trading update.

The merger is grinding along – a shareholder vote won’t be until the end of the year, and the prospectus are yet to land.

Dhir put resistance to the deal from Capricorn shareholders down to risk arbitrage, where investors would push for the offer to rise after buying in post-announcement.

But since June, large Capricorn investors have been clear: no deal.

“The simple fact is, we don’t want Tullow paper,” Jamie Sherman, co-chief investment officer at Kite Flag Investment Manager, told Investors' Chronicle. His fund holds 6.7 per cent of Capricorn through cash-settled derivatives. “[Tullow] is high risk and highly-levered,̶1; he added. "This is effectively like a magic bean story, trading our dollars today for the promise of something in the future."

Legal and General Investment Management (LGIM) and Palliser Capital have also come out against the deal. Palliser and Sherman both said investors could simply buy Tullow shares if they wanted exposure, while the Kite Lake co-CIO said the bigger company could simply raise cash through an equity issue if shareholders were happy to see their stakes diluted.

Sherman said Capricorn should launch a strategic review to gauge third-party buyer interest, and if that does not bear fruit, then "return the bulk of the cash to shareholders" from both the India award and 2023 contingent payments from North Sea and Senegal divestments, while focusing operationally on the Egyptian assets it bought last year.

Tullow has an easier threshold to pass with the shareholder vote, with a simple majority, while Capricorn needs 75 per cent support to get the deal through. When the merger was announced, Capricorn chief executive Simon Thompson said it would “allow the two companies to accelerate investment in new opportunities across the continent, while retaining a resilient balance sheet and delivering attractive returns to shareholders”.

Stifel analyst Chris Wheaton, another sceptic, puts Capricorn’s net asset value (NAV) at 271p a share. He increased this in June based on contingency payments Capricorn will likely receive for the Senegal asset(s) it sold to Woodside Energy (WDS) in 2019.

Other analysts, covering Tullow, see the deal more favourably. The combination “makes sense strategically for the combined scale it brings in this production-led E&P era”, said Mark Wilson at investment bank Jefferies.

[alfiex] 22/8/2022 18:53

Looks like no decision on Kenya for the foreseeable then

[xxnjr] 22/8/2022 16:47

"Raila Odinga, who came second in Kenya's presidential election, has gone to court to challenge the result, describing it as "fraudulent". In a scathing 70-page legal argument, he alleges there was a pre-planned effort to alter the outcome.

According to the electoral commission, Mr Odinga took 48.8% of the vote, losing to William Ruto's 50.5%. An independent monitoring organisation said the commission's final result was in line with its own projection.

However, four of the seven electoral commissioners refused to endorse the outcome, alleging that the way the final results were tallied was "opaque".

The seven judges at the Supreme Court will have 14 days to make a ruling."

Meanwhile Rome burns. Just like in the UK.

[rossifumi] 22/8/2022 15:37

The share price is constantly being manipulated at the expense of PI's, shocking this should be so much higher

[kulvinder] 22/8/2022 14:56

I am beginning to think this share really is a dog, a disillusioned investor of nearly 3 years....

[badger36] 22/8/2022 14:17

Deal is dead, long love the deal. Wonder what the next plan is

[badger60] 21/8/2022 08:06

Much better that Capricorn is left to paddle its own canoe, using it's cash pile to develop intelligent organic growth, instead of merging with Tullow oil who will undoubtedly make a mess of it.....as Tullow normally does. Capricorn has it's own assets along with 5 NSG drill prospects partnered with Deltic. A Capricorn t/o of Deltic may well be a good fit, especially given the upcoming Shell/Deltic drills which could well dovetail with other NS gas assets into producing a highly productive and valuable network.

[la forge] 20/8/2022 08:05

xxnjr
20 Aug '22 - 08:44 - 57894 of 57894
0 0 0
Worth remembering the details of Africa Oil's Kenya Farm Down to Maersk Oil back in 2015.



AOI sold a 25% stake for $344m + S83m + $15m + $75m + $405m = $892m

At the time that valued TLW's stake [50%] at $1.784bn

TLW still have 50% and are trying to offload an undisclosed % to ONGC Videsh and Indian Oil Corporation. Maersk Oil was subsequently bought by Total France which accounts for Total's 25% position today.

[xxnjr] 20/8/2022 07:44

Worth remembering the details of Africa Oil's Kenya Farm Down to Maersk Oil back in 2015.



AOI sold a 25% stake for $344m + S83m + $15m + $75m + $405m = $892m

At the time that valued TLW's stake [50%] at $1.784bn

TLW still have 50% and are trying to offload an undisclosed % to ONGC Videsh and Indian Oil Corporation. Maersk Oil was subsequently bought by Total France which accounts for Total's 25% position today.

[badger36] 19/8/2022 07:20

Capricorn at year high ?Kill this hair brained plan. What BOD could even consider a tie up with an outfit in the sector that can't reflect the high price of oil. As for drilling it's a duster buster. Everything they touched may as well be sulphur and water

[kulvinder] 18/8/2022 15:19

I think most of us who are invested in here will die of boredom before anything happens here, may end up passing my cert over to the kids....

[badger36] 18/8/2022 14:36

Compare the one year Tullow and Capricorn chart. Instructive

[subsurface] 18/8/2022 11:14

Kenya

Kenya's closely fought presidential election will offer continuity for international oil firms operating in the country, provided that deputy president William Ruto's victory can withstand a looming legal challenge from longtime opposition leader Raila Odinga.

[fizzmiss] 18/8/2022 07:04

Blatant corrupt share price manipulation as you like, whilst Raul plays Waldo and the FSA do nothing,

Resign and disband!

Compare the share prices and assets with Enq and TLW; now tell me our share price is not blatantly being manipulated lower!

[fizzmiss] 16/8/2022 18:43

TLW is truly invested into a civilized country wow wow wow