Tullow Oil Share Discussion Threads

[franky15] 29/9/2022 18:02

Old news Capricorn's done the damage

[alfiex] 29/9/2022 17:50

To be fair rns is quite positive, at current share price it was never going to happen, unless they were trying to nick cne

[kulvinder] 29/9/2022 17:15

Tullow issue an RNS after close, this will not do us any favours on open tomorrow morning. If they kept it hush hush till a merger circular was issued, we may have already hit 60p instead we sit at 41p, what will it be tomorrow I wonder.

[maywillow] 29/9/2022 17:02

Tullow shareholders lose out as merger partner turns to new suitor


Jon Ihle

September 29 2022 05:25 PM

Shareholders in Tullow Oil are set to lose a potential lifeline after the company's proposed merger of equals with cash-rich Capricorn Energy fell apart Wednesday.

Capricorn, which had provisionally agreed to an all-share tie-up with ailing Tullow in June, has instead proposed a different merger with NewMed Energy after shareholders turned on the original deal.

The collapse of the proposal leaves Irish-founded Tullow empty handed just two weeks after chief executive Rahul Dhir assured investors that the merger was on track with the backing of both boards.

Capricorn's board of directors plans to unanimously recommend the deal with NewMed and unanimously decided to withdraw from the merger with Tullow.

A completed transaction would have created a $1.9bn energy firm with assets spread from Ghana to Egypt and rescued Tullow from years of chronic underperformance, management departures and fire sales of assets to avoid insolvency.

Shares in Capricorn jumped as much as 8.9pc in London, with Tullow falling as much as 5.5pc after the announcement, signalling the relative divergence in fortunes from the switch.

The new merger would make the combined company one of the largest upstream energy independents listed in London, according to a statement on Thursday.

Under the terms, NewMed shareholders would own almost 90pc of the combined venture, with Capricorn shareholders taking the rest. NewMed will pay Capricorn shareholders a special dividend of $620m.

"The board has engaged in a robust and dynamic process to evaluate options for Capricorn and considered a broad range of external factors and market conditions," said Nicoletta Giadrossi, chair of Capricorn. "We believe this is a compelling transaction which combines near-term value realisation with ongoing participation and value creation in a world-class gas company."

Leaving Tullow "is unsurprising given increasing concerns over valuation and strategic rationale," said Will Hares, a global energy analyst for Bloomberg Intelligence. "An Israeli offshore gas player offers far more compelling operational, regional, and gas synergies."

More than a quarter of Capricorn's shareholders last month said a proposed merger with Tullow lacked merit, undervalued the company, and that they would vote against the transaction.

One activist investor, Palliser, pointed out that two-thirds of Capricorn’s value was in cash and near-term receivables which Tullow was getting at a deeply discounted price. Palliser’s chief investment officer James Smith said the deal undervalued Capricorn by $500m, or two-thirds of its market value.

The new tie-up will combine NewMed, one of the largest gas producers in the Mediterranean, with Capricorn's portfolio of production and exploration in countries including the UK, Egypt, Mexico and Suriname. The deal will create a "gas and energy champion" in the Middle East and North Africa, the companies said.

The transaction furthers NewMed's expansion plans following a tie up with Israel's Enlight Renewable Energy Ltd. earlier this year.
Business Newsletter



"We have a shared vision on a disciplined capital allocation framework," NewMed CEO Yossi Abu said in the statement. The company aims to "significantly increase our production while expanding to the LNG market with the aim of supplying Europe's growing gas demand."

Both Capricorn and NewMed shareholders will need to approve the deal at respective general meetings.

(additional reporting, Bloomberg)

[badger36] 29/9/2022 14:48

Capricorn must be laughing their heads off at the cretins. They knew the debt is monumental and the desperation of Tullow clowns allowed outsiders a glance at the figures. That information has leaked and the collapse started over a week ago

[xxnjr] 29/9/2022 14:47

Yes but revenue in dollars. It's neutral. We don't need to pay down debt like today but given Plan A has failed, just feel reducing debt ought to be THE priority rather than falling someway down the list behind growing production both organically and through acquisitions. The expense of growing production means there's not a lot left to pay down the debt. With the 2025's currently at 69% why on earth wouldn't you buy some bonds back?

[mcsean2164] 29/9/2022 14:11

Yeah, not great debt dominated in dollars... It's such an awful investment for me anyway. Can't understand it anymore probably need to sit down and do some study.

Assets seem good, debt high relative to market cap but given cash flow one might think it's manageable.

[alfiex] 29/9/2022 14:05

Looks like this is a disaster down 6% what if anything will lift it? IF Kenya ever happens whats it worth? A long road to recovery and maybe £1 just a dream

[mcsean2164] 29/9/2022 13:54

Is there an urgent need to pay down debt? Debt not due to be rolled over for a while. Who knows maybe inflation will match the interest rate...

CNE is a pr disaster but hopefully our position improves with the continued high oil prices.

[xxnjr] 29/9/2022 13:41

Any Kenya deal would have to include cash, otherwise no point as urgent need to pay down TLW debt. I'm on a 24 month fixed price energy rate but that expires next April. Nevertheless booking a flight sounds appealing.

[subsurface] 29/9/2022 13:05

I think only if Tullow get some cash out of it XX.
Don,t forget to send in your Gas reading then book your flight.winter here.

[xxnjr] 29/9/2022 12:58

All will be forgiven if Kenya comes in. Rather a big "IF" though although open to being pleasantly surprised!

[subsurface] 29/9/2022 12:52

Nothing about it on the Tullow website

[xxnjr] 29/9/2022 12:48

surprised TLW haven't issued an RNS as even they must have known the inevitable was inevitable and now its happened one would have thought TLW would have prepared something in advance.

[badger36] 29/9/2022 12:24

With the huge debt pile and rising rates will Tullow even survive?

[subsurface] 29/9/2022 12:06

Stick with the plan Jubilee and Ten lets see what mid 2023 brings from new wells to increase production.

[badger36] 29/9/2022 11:56

All those carpet baggers must be grateful that three CFOs gifted them a bonanza What a complete collection of idiots and well paid

[badger36] 29/9/2022 09:40

Embarrassing in the extreme. Shows how unsuitable and incompetent the entire team is to have kept on swimming against the tide Hope that special dividend is classified as non earned income and fully taxed rather than a capital gain

[xxnjr] 29/9/2022 09:26

Now time for Plan B. Knew CNE deal wouldn't happen. Was complete nonsense on TLW's behalf to pretend the transaction was still feasible as Hedge Funds held a blocking vote. Bit of a dent to Rahul's credibility. Strange really considering he's an investment banker. Acknowledging ofc that Rahul has done a brilliant job on TLW with stabilizing production and rig efficiencies.



"Proposed pre-Completion cash special dividend of $620m to Capricorn shareholders.
Expected to deliver total value to Capricorn shareholders of 271 pence per Capricorn share.
Withdrawal of intention to recommend the Tullow Combination....."

At least we now won't be spending zillions($) on pre-merger fees and advisors for a deal that was never going to happen. And the bonds are getting cheaper by the day.....

[bootycall] 27/9/2022 10:01

The Ghanaian Government and GNPC have a major headache with their Genser contractual supply agreements…on a mark to market basis, this is a major unfunded liability ?

I wonder….How can they get out of such a mess when the median cost of gas supply in Ghana is sourced at approx $6 per unit ?
Answer…sign a 13 year gas supply agreement perhaps for 200 mmcf per day supply from a local supply perhaps ?

Watch this space.

[xxnjr] 26/9/2022 22:55

The Scottish CFO left by "mutual agreement" earlier this year. He was replaced by an interim CFO the one who did very well on the recent call. He's only there until the new guy from Enquest assumes control.



Except that the Enquest guy seems to have been dropped as if the Cairn merger happens the Cairn CFO becomes the new TLW CFO. Presumably the Enquest guy gets a very large TLW pay off without doing a days work? As he appears to be out of a job given Enquest appointed a new CFO when he exited there.

[subsurface] 26/9/2022 21:25

Thanks franky
I took the dates from this website

[franky15] 26/9/2022 21:04

Africa oil week is actually Mon 3rd oct-7thMight be why Africa oil ceo said month end ..