Tullow Oil Share Discussion Threads

[bootycall] 18/9/2023 07:59

Re Kenya , certain sovereign countries must be chalking up significant due diligence costs. I always laugh at people’s naivety when large capital projects are getting sign off . Everyone is playing a game of chess. Has anyone ever known Chinese or Indian NOC’s rush paperwork. Now Tullow has 100% it has flexibility to be a lot more generous appeasing key groups with any salacious demands. I do not profess to know what is causing the holdup. The Kenyans appearing to be stalling over something. Bigger share of the cake I suspect? Logic tells me Tullow will emerge with a deal which will be very value accretive for shareholders. Always amuses me that investors get excited about drilling the next high risk well when Tullow is ignored despite being a fraction away from sign off on a multi billion FDP. Crazy ! DYOR

[reubenblackgold] 17/9/2023 10:51

If kenya pull out of the project they could owe tlw around $2b, if due to circumstances tlw relinquish the asset, the Kenyan government would have nothing to pay.....

[subsurface] 15/9/2023 14:52

Thanks for the update Franky.

[franky15] 15/9/2023 10:50

From Investor relations regarding Kenya Note 11 of our HY Results Statement is the latest with regards to Kenya:Since 1 January 2022, there have been ongoing discussions with the Government of Kenya (GoK) on approval of the Field Development Plan (FDP) submitted on 10 December 2021 and securing government deliverables. An updated FDP was submitted on 3 March 2023 and is being reviewed by the GoK before ratification by the Kenyan Parliament. Energy and Petroleum Regulatory Authority (EPRA), the regulator, has recently engaged third party consultants to review the revised FDP and extended the review period to Q1 2024. The Group expects a production licence to be granted once Government due process has been completed.Regards

[xxnjr] 15/9/2023 06:35

"Net gas production in Ghana averaged 7.3 kboepd in the first half of the year."

Jubilee produces about 200 mmscfd (33,000 boepd) of associated gas every day and has done for years. Typically

30 mmscfd (6000 boepd) gets flared
10 mmscfd fuels the fpso
60 to 80 mmscfd re-injected
100 to 120 export to GNPC

TEN produces another 155 mmscfd (26,000 boepd) of associated gas, 70% of which is re-injected. There's no shortage of TLW gas even without a gas focussed development of TEN. The issue has always been lack of commercial arrangements for the gas with GNPC and limitations on processing capacity at GNPC, effectively about 130 mmscfd.

[hubshank] 14/9/2023 18:53

Guess I'll have to stick around for the roller coaster! All fun and games! :-)

[humpty dumpty 33] 14/9/2023 17:32

This was part of a special interim agreement.
From this July onwards it will be sold at higher prices.
The future looks bright with the new revenue stream for Tullow.
(7.3 kboepd should be equivalent to about 43 Mio $ ($2.90/mmbtu) of additional revenue per year)

1 barrel oil is equivalent to 5.6 mmbtu of gas.
7.3 kboepd x 1000 x 5,6 x 365 x $2.90/mmbtu = 43271480 $

Ghana's gas price is currently averaging at $6.50/mmBTU

While commercial discussions continue for the long-term gas sales, can I well imagine that in the end a profitable deal will be achieved for both sides. (maybe somewhere between $2.90/mmbtu and $6.50/mmBTU)
This would mean:
e.g. at $4 about 60 Mio. additional revenue per year.
e.g. at $4.5 about 70 Mio. additional revenue per year.

Gas commercialisation
Net gas production in Ghana averaged 7.3 kboepd in the first half of the year. The Interim Gas Sales Agreement, initially valued at $0.50/mmbtu, was amended in July 2023 to a price of $2.90/mmbtu until the end of the third quarter of 2023. The commercialisation of Jubilee gas represents a new revenue stream for Tullow of c.$4 million per month, while commercial discussions continue for the long-term gas sales agreement. Full year net gas production in Ghana is expected to average c.7 kboepd.

[reubenblackgold] 14/9/2023 15:36

Alf
You are prudent to ask this question, the market is smarter than the rampers. The rns stated that the gas equated to 7kbopd, but this is being sold on the cheap.

[badger36] 14/9/2023 15:29

Whilst I appreciate all the information and details I too am worried given the age old view that the market is forward looking and yesterday's news is of no consequence.Guess it's the poor exploration results coupled with huge debt and false promises

[alfiex] 14/9/2023 14:25

Booty, honest question, all these increased volumes gas deals debt reducing, possibility of a deal in Kenya etc. How come the market is not recognising all these positives as we are?

[bootycall] 14/9/2023 12:05

@Reubenblackgold
Have you checked guidance for 2024 ? Just because Jubilee SE came on production 1 month late does not mean it has any bearing on 2024 production guidance . On the contrary , the flow rates are very good and once we have the injectors supporting I think upgrades are on the horizon.

If you disagree , fair enough . Just for the record, what do you understand the 2024 guidance to be ? Do you recall that some of the analysts cast doubt only 6 months ago that Tullow would even be able to reach 100kbopd gross in Jubilee. Boy were they wrong…
Then look at July/Aug free cash flow of $75m ….without the last well which came on stream a week ago….and thats with negative value hedges…your case it starting to fall apart. Have you allowed for the extra $50m dollars coming from annualised gas sales implied by the interim Ghana agreement …which double or trebles as the additional processing facilities come on stream …or what about the high GOR wells in jubilee being production constrained until additional gas off-take is agreed.

You are clutching at straws… rinse and repeat merchant . Booty



Please do not rely on any of the facts or opinions in the above post when making an investment decision.

[phillis] 14/9/2023 11:21

Not much by way of disclosed short positions

[subsurface] 14/9/2023 10:35

Reuben are you obsessed with experts?

[reubenblackgold] 14/9/2023 10:27

The experts are obsessed with shorters, and the shorters may still have many shares to dump

Production guidance is the issue, and if the OP pulls back this will tank.

[guy_fawkes] 14/9/2023 09:37

Hubshank - It never hit 45p either. "What do you think - could it go crazy and hit 45p this month? Percentage wise it quite a hike but stranger things have happened!"

[hubshank] 13/9/2023 21:35

Guy Fawkes - guess we won't be getting our 40p this week after all! ?. Maybe next year :-)

[xxnjr] 13/9/2023 11:38

Agreed. But minimum purchase on the 2025 Bonds is in 200K parcels aiui. or say about $145K.
Unless I've got that wrong.

[tigerbythetail] 13/9/2023 11:22

Looked at this.
Surely, the 2025 Tullow bonds at around 72p face value are a far safer and more compelling investment than the shares? Today's mostly positive RNS increases the chances that the bondholders will get paid in full, which would be a very handsome return for them. Shareholders are not in such a strong position.

[badger36] 13/9/2023 11:11

If there is so much promise I expect to see insiders loading up on the market and not free options or am I simply a fool

[bootycall] 13/9/2023 10:42

I will not be a nuisance poster so this is my last post for time being. I hear that the FPSO market is substantially weaker than when the original lease for Ten was negotiated. Expect decent costs savings from the FPSO renegotiation brought on assuming success with any revised contract terms . To be honest I was not very clued up on this until the Q&A session. Now having looked into it …could be exciting…especially as Rahul made an off the cuff remark about potentially sharing infrastructure ? Could this involve Pecan next door ?




Disclaimer as previous post .

[badger36] 13/9/2023 10:31

If there is any value it will only be recovered by it being taken over

[jugears] 13/9/2023 10:17

Glad I sold when I did!

[xxnjr] 13/9/2023 10:08

"Sabotage from the inside"

Not really. Production on Jubilee has increased from a relative recent c.65K at its lowest point to 107K now apparently. With 97% uptime. That is seriously impressive. The sabotage was committed by the previous CEO who was fired.

[reubenblackgold] 13/9/2023 09:51

When JSE came online there was no increase in production guidanc, this was the warning sign.

Today they try to impress with the 7k gas, but this is being sold on the cheap.

Snorkel for Anton and Co.