Tullow Oil Share Discussion Threads

[subsurface] 24/5/2023 07:33

The first of five Jubilee wells to be brought onstream this year, came online in the past few days at initial rates of c.17,000 bopd, above expectations.

[subsurface] 23/5/2023 23:49

Well said mcsean you could look at it this way
we had 50% of nothing now we have 100% of nothing.

[boston 004] 23/5/2023 22:10

Peel Hunt Broker recommendation, BUY with new 80p target

[mcsean2164] 23/5/2023 20:02

It is funny, the first bit of potentially positive news is our partners abandoning our asset...

[badger36] 23/5/2023 12:35

FYI Davy ViewTullow has announced that the two minority partners on its project in Kenya intend to issue notices of withdrawal for differing internal strategic reasons. Tullow's working interest will increase from 50% to 100%, which gives more optionality and flexibility on the project. Tullow is engaged in detailed farm-out discussions on the project.KenyaAfrica Oil and Total Energies are withdrawing from Kenya as they shift focus to West Africa. The licenses relate to Blocks 10BB, 13T and 10BA in the Lokichar Basin. Tullow's working interest in the project will now increase to 100%. It takes full control of the project in trying to secure a strategic partner. It means that any future JV on the project will have a simpler structure.Farm-out agreement discussionsTullow has notified all prospective strategic partners of the change in ownership. The company remains in detailed discussions with a range of potential partners regarding a farm-out of the project. Net capex on the project in Kenya in 2023 is expected to increase from only $10m to $15m out of $400m across the group and is immaterial in a group context. Any increase in capex related to the development of the project is contingent on securing a strategic partner. The company believes Kenya could add materially to reserves at a minimal capex outlay.Boost to 2C contingent resourcesTullow has confirmed that its 2C contingent resources in Kenya will increase from 231 mmboe to 461 mmboe. Overall group 2C contingent resources increase from 605 mmboe to 836 mmboe, which is above the company's long-term historical average. Tullow's commercial reserves are 229 mmboe, so Kenya could be material in a group context post any farm-out agreement and development of the project. We view the project in Kenya as essentially being a free call option given Tullow's current enterprise value.

[xxnjr] 23/5/2023 11:58

Market seems to be taking today's news ok. these are Upstream's comments

Tullow Oil's challenging, multi-billion dollar South Lokichar project in Kenya has gotten just that bit more complex after both TotalEnergies and Africa Oil decided to quit the oilfield development.

The long-delayed project aims to tap about 460 million barrels of oil in multiple fields in Kenya's remote, arid Turkana county, exporting 130,000 barrels per day via an 895 kilometre pipeline to a terminal in Lamu port.

A complex mix of commercial, political, technical and environmental challenges — not to mention the impacts of the Covid-19 pandemic — have pushed the project at least four years behind its original schedule.

The departure of the French supermajor and London-listed Africa Oil is likely to complicate things further, with Tullow now holding 100% of the asset.

Over the last few years, the operator has been trying hard to reduce what, until today, was its 50% stake in the project and, most recently, was in talks with India's ONGC Videsh and Indian Oil Corporation about one or both becoming "strategic" partners.

There have also been reports that China's Sinopec may be interested in the asset.

Africa Oil quit because it sees better potential elsewhere in its portfolio, particularly in the Orange basin offshore Namibia, a play Tullow exited last year days before Shell and TotalEnergies unveiled two huge oil discoveries.

Africa Oil chief executive Keith Hill said: "We have taken the decision to exit our Kenya concessions as our strategy has shifted to focus on production and high-potential exploration opportunities, including our Orange Basin portfolio where we are now appraising the exciting Venus discovery offshore Namibia."

In a statement released this morning, Africa Oil said it has submitted withdrawal notices on Blocks 10BB, 13T and 10BA in Kenya "to unconditionally and irrevocably withdraw from the entirety of the joint operating agreements and production sharing contracts (PSCs) for these concessions."

The company has also submitted notices to Kenya's Ministry of Energy & Petroleum, requesting the government's consent to transfer all of its rights and obligations under the PSCs to Tullow.

The carrying value of the Kenya was written down to $58.6 million as at 31 December 2022, with Africa Oil intending to further impair this value to zero.

The company has been involved in the Kenya assets since they were discovered in 2008 and, despite its departure, believes they will be commercialised.

"We continue to believe these discoveries will form the basis of a significant oil producing province in the coming years with strategic value for the country."

Tullow painted a positive picture of the company exits, saying that owning 100% of the project "creates more optionality (and) more flexibility in the ongoing process to secure strategic partners, creates a simpler joint venture partnership and streamlines project delivery."

Tullow said the the prospective strategic partners have been informed of the decisions by TotalEnergies and Africa Oil, stressing that "they remain engaged," while adding that detailed farm-out discussions continue with a number of companies.

"Whilst the process has taken longer than expected, Tullow remains focused on securing a strategic partnership this year," said the asset operator whose contingent resources are now expected to rise from 231 million barrels of oil equivalent to 461 MMboe.

Two months ago, Tullow submitted an updated field development plan (FDP) to Kenya’s authorities, with chief executive Rahul Dhir saying at the time that "we’re expecting the FDP approval process, including ratification by parliament, to conclude this year,” he said.

Assuming Nairobi approves the FDP, one or more new partners can be brought in and finance raised, a final investment decision could be taken in 2023 or 2024.

This would suggest first oil flowing in 2027, at least five years behind schedule and 15 years after oil was discovered in Kenya.

SP Angel analyst David Mirzai said the company exits from Kenya "should come as no surprise to investors following the announcement by TotalEnergies in 4Q 2022 that it had initiated a procedure to withdraw from these licenses and Africa Oil’s material year-end 2022 write-down of the assets."

An analyst note from Peel Hunt - which acts as a Tullow broker - said the impact of the withdrawals on the chances of achieving a farm-out "can be argued as negative or positive, highlighting that a lack of partners "should simplify and speed up discussions."

[xxnjr] 23/5/2023 11:49

So, that tanker finished loading its half load* at TEN yesterday afternoon and was parked overnight in the Jubilee Waiting Area where it remains today. JWA is basically a car park 20 miles NE of the field where tankers anchor up whilst waiting to take on a Jubilee cargo. Will probably be there for a few days at a guess. Was thinking it might give us a steer on a new well coming on stream or not (which it will) but this won't happen before the AGM tomorrow.

* Tankers load between 950K and 1m barrels = 1 cargo from either Jubilee or TEN.

VLCC's usually pick up 1 cargo from Ghana and a second load of 1m barrels from elsewhere in W.Afr. It just so happens in this case from the look of things that timings/scheduling of production may coincide meaning 2 cargos (1 x Jub, 1 x TEN) on one VLCC tanker.

Aframax tankers the only other class to offload from Ghana can handle 1 cargo of 1m barrels.

[badger36] 23/5/2023 09:22

Thanks Booty Hope you spot on

[bootycall] 23/5/2023 09:19

@badger36. Things are seldom the way they look in the oil industry. For example, does India give a hoot about XR or buying Russian Oil, whereas Total have had to run the gauntlet over their Ugandan interests and eco warriors and Africa Oil hardly have the balance sheet or political clout to pursue a Kenyan project that they have no control over and is not likely to produce first oil for three years. Hence, you have the “blink and you lose moment”. Rahul is hardly known for his love of “throwing the dice” so my view is “wait and see and you might get a pleasant surprise “ or not :) Booty

P.S. The sums are big. Be patient

[subsurface] 23/5/2023 09:14

This is a low cost development project?
Just hope tullow can recover costs at some point.
perhaps this is why Tullow have to hang on.

[maywillow] 23/5/2023 08:48

IRISH TIMES


Tullow faces new Kenya setback as Total, Africa Oil quit

Tullow is now left alone to get development off the ground


Paul Burkhardt
Tue May 23 2023 - 08:30

Total Energies and Africa Oil are abandoning a project in Kenya, increasing challenges for operator Tullow Oil following a years long effort to get the development off the ground.

Tullow found crude in the East African country more than a decade ago, but commercial extraction is yet to begin as it’s failed to find an additional partner and Kenya’s government has been slow to approve a development plan. With Total and Africa Oil now exiting, Tullow is left on its own to get the project under way.

The company’s two partners in the country will “issue notices of withdrawal from Blocks 10BB, 13T and 10BA in the South Lokichar Basin for differing internal strategic reasons,” Tullow said Tuesday in a statement. “As a result, Tullow’s working interest in these blocks will increase from 50 per cent to 100 per cent.”

The company’s shares sank as much as 3.9 per cent to 23.94 pence at the open in London.



Africa Oil released a separate statement, saying its “strategy has shifted to focus on production and high-potential exploration opportunities” elsewhere. Total didn’t immediately respond to a request for comment.

Tullow is continuing its search for a partner and said the change in shareholdings gives it “more flexibility” in that process. “Detailed farmout discussions continue with a number of companies,” it said, adding that it’s still hoping to secure a strategic partnership this year. - Bloomberg

[xxnjr] 23/5/2023 07:16

Seems like TLW wanted to get that elephant out of the room before the AGM.

[alfiex] 23/5/2023 07:10

Hope this gives us a boost for the share price

[hsfinch] 23/5/2023 07:09

Is that taking inflation into account?

[xxnjr] 23/5/2023 07:07

23 May 2023 - Tullow Oil plc (Tullow) announces that Tullow Kenya B.V., as operator of its licences in Kenya, has been informed by its two minority partners of their intention to issue notices of withdrawal from Blocks 10BB, 13T and 10BA in the South Lokichar Basin (the "Project") for differing internal strategic reasons. As a result, Tullow's working interest in these blocks will increase from 50% to 100%.

The Board considers that owning 100% of the Project creates more optionality, gives Tullow more flexibility in the ongoing process to secure strategic partners, creates a simpler Joint Venture Partnership and streamlines project delivery. This is a low-cost development project that has the potential to unlock material value for Kenya.

The prospective strategic partners have been informed. They remain engaged and detailed farm-out discussions continue with a number of companies. Whilst the process has taken longer than expected, Tullow remains focused on securing a strategic partnership this year.

[xxnjr] 22/5/2023 17:35

Africa Oil indicated on their results call that they would be prepared to sell their stake if a buyer came forward.

[farrugia] 22/5/2023 14:12

if they sold the Kenya operations for a good amount, that would de-risk the company?

[subsurface] 22/5/2023 13:20

Thanks Farrugia. very interesting times in Kenya.

[farrugia] 22/5/2023 12:43

ONGC, Oil India in talks for 50% stake in $3.4 bn Kenya oilfield, Chinese firm enters fray

[xxnjr] 21/5/2023 00:10

So, the tanker I mentioned that was on its way to Jubilee has arrived, except that it is offloading from TEN which is consistent with about 20K there. As it's a VLCC possible it may call in at Jubilee as well. We'll see.

[sbb1x] 20/5/2023 17:58

That's now good is it @100 a barrelTullow's 2023 Group production guidance of 58,000 to 64,000 bopd and cash flow guidance of c.$200 million at $100/bbl remains unchanged.

[xxnjr] 20/5/2023 08:41

Personally speaking I wouldn't rush to jump in and buy more until we have clarification on TEN; current production rates and forward guidance if any at the AGM.