Tullow Oil Share Discussion Threads

[badger36] 01/10/2022 08:29

Jilted Tullow Oil must tackle debt as Capricorn picks up another partnerhttps://www.irishtimes.com/business/2022/09/30/jilted-tullow-oil-faces-tougher-task-tackling-debt-as-capricorn-picks-up-another-partner/

[xxnjr] 30/9/2022 23:50

At a simplistic level assuming TLW have the cash doesn't it mean they can buy a chunk of the debt on the open market at 64% of par? Reducing debt burden and interest payments.

[alfiex] 30/9/2022 18:17

Excuse my ignorance but is that good or bad?

[xxnjr] 30/9/2022 16:59

2025 Bonds now trading at 64%.

[badger36] 30/9/2022 09:33

No they claim in their PR that they failed to turn up. Now that's comical

[crescenter] 30/9/2022 09:30

Has the BoD noticed that theyhave been jilted at the altar by capricorn?

[waldron] 29/9/2022 22:56

UPDATE: Tullow Oil plans to terminate agreement with Capricorn

Thu, 29th Sep 2022 19:35
Alliance News

(Alliance News) - Tullow Oil PLC on Thursday said it intends to terminate its co-operation deal with Capricorn Energy PLC, after Capricorn proposed a merger with NewMed Energy Ltd.

Capricorn also withdrew its recommendation for the previously agreed combination with Tullow in an announcement that was released earlier on Thursday.

The London-based oil and gas exploration company explained that it accepts that "without the recommendation and cooperation of Capricorn the scheme of arrangement cannot practically be implemented and become effective."

Therefore, it decided to not increase its offer for Capricorn.

Further, the company stated that it will not elect to implement its offer by way of a contractual offer.

"The board of Tullow continues to believe the terms of the combination with Capricorn would create value for Tullow shareholders. However, the successful delivery of the business plan, strong operating and financial performance and a high-quality, opportunity-rich portfolio reinforces the board's confidence in Tullow's future," Tullow said.

Earlier Thursday, Capricorn stated it will acquire all of the partnership interests in NewMed in exchange for new Capricorn shares. The exchange ratio will be 2.33 new Capricorn shares for every NewMed participation unit.

The combination will mean Capricorn shareholders hold 10.3% of group's share capital while NewMED unitholders will hold 89.7% of the share capital. The company will trade under the name NewMed Energy, and it expects to retain its premium listing on the London stock exchange.

The merger will create one of the largest upstream energy independents listed in London. Capricorn said that the new company will have a diversified portfolio of "high-quality producing assets

" in Israel and Egypt underpinned by 45% interest in Leviathan, one of the world's "most attractive" gas fields. It will also have long-term contracts which provide strong cash flow visibility.

Under the transaction, Capricorn shareholders will receive a special dividend of USD620 million equivalent to GBP1.72 per share.

Recently, Capricorn - formerly known as Cairn Energy - returned more than USD500 million to shareholders following the receipt of a long-awaited tax refund in India.

The merger exchange ratio values Capricorn, on an ex-dividend basis, at USD338 million or 99 pence per share, a 46% premium to the theoretical ex-dividend price on September 28. The ex-dividend price is the price of a stock without the value of the next dividend payment.

The expected total value of the transaction to shareholders is equivalent to 271 pence per share, a 13% premium to the closing price on September 28.

Chair Nicoletta Giadrossi said: "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. The combination with NewMed and a cash special dividend represent the delivery of significant value for Capricorn shareholders. 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."

The board unanimously supported the merger and as a consequence has removed its recommendation from the Tullow deal which it had recommended in June. Although it said it "continues to see merit in the Tullow combination", the NewMed deal offered a more "compelling opportunity to receive value from both upfront cash and via a residual interest in a MENA gas

and energy gas champion."

By Abby Amoakuh; [e-mail]

[fizzmiss] 29/9/2022 21:57

Well what a fluckup that was, yet another GAFF by Raul the numpty, more shareholder money wasted!

Please RESIGN!

[franky15] 29/9/2022 19:02

Old news Capricorn's done the damage

[alfiex] 29/9/2022 18:50

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 18:15

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 18:02

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 15:48

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 15:47

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 15:11

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 15:05

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 14:54

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 14:41

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 14:05

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 13:58

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