Tullow Oil Share Discussion Threads

[xxnjr] 16/12/2023 10:45

Some shipping lines like Maersk have temporarily suspended transits via the Red Sea following Houthi attacks, however it's believed the US and partners may soon announce plans for a task force to escort ships for safe passage whilst off western Yemen.

"Oil prices were little changed on Friday, with the international benchmark Brent crude up 0.3 per cent at $76.84 a barrel. Mærsk’s share price jumped 7 per cent on expectations that the crisis would cause freight rates to rise."

[badger36] 15/12/2023 16:47

DAVY VIEWTullow has announced the final results of its recent tender offer for its 7% March 2025 notes. $141m was validly tendered at a price of 92%, with Tullow previously offering to buy back up to $300m. Bondholders are clearly now comfortable holding on to get par at maturity and this is very positive to see.

[zingaro] 15/12/2023 16:40

Thx. I see now.

[xxnjr] 15/12/2023 14:55

In the middle of the field at the moment miles from anywhere but

Gross debt reduction was 381 million before today's announcement (see 2026 RNS) and today it is 400 million despite reducing bonds by another 140 million odd today.

[zingaro] 15/12/2023 13:34

xx: explain please. as 381 and 400 are not 80-100 apart. Or are you referring to total vs gross ?

[xxnjr] 15/12/2023 12:44

as ever there's a twist as the 2026 bond result rns said

"this brings our total debt reduction this year to $381.3 million"

todays says

"We have reduced gross debt by almost $400 million this year"

perhaps suggesting they borrowed $80m to $100m to pay off the latest 2025's buyback?

[badger36] 15/12/2023 11:19

Slow and gradual. Starting to eliminate the exploratory nature of the business which was mainly binary

[xxnjr] 15/12/2023 09:51

and here it is



remaining debt was U.S.$633,463,000 (from $800m 2025 notes)
Tendered in offer U.S.$140,933,000 @ 92%
$492,530,000 outstanding now

Richard Miller, Chief Financial Officer, Tullow , commented today:

"2023 has been a transformative year for our balance sheet. Following the start-up of the Jubilee South East project earlier this year, we are now in a period of material free cash flow, with approximately $800 million expected to be generated between 2023 to 2025. This free cash flow, together with cash on balance sheet and the $400 million notes facility commitment from Glencore, will allow us to fully address all outstanding 2025 Notes and puts us in a strong position to successfully refinance the remaining 2026 Notes. We have reduced gross debt by almost $400 million this year and we remain on track to becoming a low-debt business with a sustainable capital structure."

[xxnjr] 15/12/2023 09:19

there will be an RNSSS

[subsurface] 15/12/2023 09:01

Can a tender offer fail?

Google say

A good indicator of whether or not a tender offer will go through or fail is the stock price.
Problem is its masked with the Poo at the mmoment,so should we expect an RNS ?

[xxnjr] 15/12/2023 07:23

Tender offer on the 2025's closed 5pm EST yesterday.

[xxnjr] 14/12/2023 16:03

Director Buy: Roald Goethe 100,000 @ 33.18p

According to me RG now has about 23.3m shares
he's spent about £372K since June 2023 adding 1.3m shares = 23.3m now

[xxnjr] 13/12/2023 11:48

Brent hit $72.50 earlier this am. Let's see if it bounces or continues down. Just as a matter of interest thought I'd take a look at the hedging. Let's assume gross production is what 62K bopd now?

According to 2Q Results RNS, we have 34,513 bopd (55%) effectively in a collar between $56 and $75 $/bbl for all of 2H/23

However the 2Q Pres shows that for last 4 months of 2023 only 28K bopd (45%) is in that collar. Also an additional 11.5K bopd (18%) of 'Puts' at $60/bbl.

5K of the 'Puts' were added between "1st Jul and 12th Sept" this year. The OP then ranged from about $75 to $90 I think; so maybe the 5K of puts are now in profit at current OP? Or is it the other way round?

The other 6.5K of puts are maybe a legacy of the refinancing in 2021 when OP was lower than now? and are presumably in loss? Or is it the other way round?

In summary the 11.5K puts may not be helping much (if at all)? But we seem to have 28K (45%) of production covered by a collar that results in $76/bbl even if OP falls to $56/bbl?

If you understood any of this you are a better person than I and please correct any errors ;-)

This is not investment advice!

[bootycall] 13/12/2023 09:07

“likely see this transaction as tantamount to a default under our methodology,”
Flawed methodology if you ask me !
Tullow has to end the ludicrous situation of having a subordinated debt maturity (2025’s) which needs to be renewed in front of the much larger 2026 issuance. Negotiations are a nightmare …much better to restructure the debt than constantly have to give concessions to both groups of debt holders because the markets in high yield debt for oil companies are currently dysfunctional.
In my eyes , debt service cover, should be the basis for a default. If there is a willing buyer and seller, what Tullow is doing is no worse than a share buyback. Hate to think what these guys have to say about those ! Booty

[badger36] 13/12/2023 08:50

Sadly not a hope. A diviner would have more drilling success. If it's sulphur you want Tullow can find it

[xxnjr] 12/12/2023 18:28

Given this forum "Tullow Oil PLC - Poised for a Takeover?" has been in existence since 17/03/06 the chances of one happening now are probably quite low ;-)

[hubshank] 12/12/2023 17:01

What are the chances of someone making a bid for the business?

[xxnjr] 12/12/2023 13:51

We may get an update on the 25's this Friday, as ".....the Tender Offer will remain open until 5:00 p.m., New York City time, on December 14, 2023."

[alfiex] 12/12/2023 10:54

Strange isn't it that you pay a couple if hundred million off your debt and your credit is down rated and share price suffers. Thats tullow oil !!!

[subsurface] 12/12/2023 10:02

Alexander Griaznov and Ivan Tiutiunnikov are the analysts here

How are Gazprom or Rosneft.doing these days?

[xxnjr] 12/12/2023 07:20

Tullow Oil Downgraded To 'SD' On Distressed Debt Repurchase; Senior Secured Notes Downgraded To 'D'
On Nov. 30, 2023, oil producer Tullow Oil PLC announced the results of its tender offer to repurchase a portion of its senior secured notes due 2026 for a total cash consideration of $102.5 million.
We view the transaction as distressed and tantamount to a default, based on the final terms and our methodology.
Therefore, we lowered our long-term issuer credit rating on Tullow Oil to 'SD' (selective default) and our issue rating on the senior secured notes due 2026 to 'D' (default).
We affirmed the rating on the unsecured notes due 2025 at 'C', pending the results of a separate tender offer that is still ongoing.
We aim to reassess the ratings on Tullow Oil and its debt shortly after the completion of both tender offers.
LONDON (S&P Global Ratings) Dec. 5, 2023--S&P Global Ratings today took the rating actions listed above.

The downgrade reflects Tullow Oil's repurchase of its senior secured notes below par. The company will buy approximately $114.8 million of its $1.6 billion of senior secured notes due 2026 for $102.5 million, which represents a weighted average purchase price of 89.3 cents on the dollar. We see this transaction as distressed and tantamount to a default due to its below-par price, which means that the investors will receive less than they had been promised originally.

We view this transaction as a continuation of Tullow Oil's liability management, which started with the first buyback of senior unsecured notes at a weighted average price of 60 cents on the dollar in June 2023, bringing the total amount bought back below par to about $281 million. Combined with the early tender amount of about $130 million under the ongoing tender offer for the portion of the unsecured notes due 2025, we estimate that the total amount of notes that the company will have bought back below par may be close to 17% of the $2.4 billion outstanding before the buybacks.

The buybacks come at a time when capital market access for lower-rated oil companies is becoming more challenging, due to the prevailing high interest rates and investors' views on the environmental footprint of the oil and gas sector.

We will reassess the ratings on Tullow Oil and its debt shortly after it completes the tender offers for its notes.The rating on the senior unsecured notes due 2025 remains unchanged at 'C' pending the completion of the tender offer, the deadline for which is Dec. 14, 2023 (unless amended). Given the announced terms, we will likely see this transaction as tantamount to a default under our methodology, and lower the rating to 'D' on completion. We expect to reassess our ratings on Tullow Oil and its notes once we have visibility on the revised capital structure. The future ratings will balance a lower debt burden, improved maturity profile, and slightly better credit metrics against the risk of further debt transactions that we might see as distressed under our methodology and the uncertainties relating to the Ghanaian sovereign debt restructuring.

[kulvinder] 12/12/2023 07:08

That don't sound good Badger - downgraded to selective default.

[badger36] 11/12/2023 22:21

Did anyone see the Twitter guy to say rating changed to SD?https://x.com/riccardino999/status/1734333135993679987?s=46&t=wwTVi4pIJsvWecEbl_ySpQ

[bootycall] 11/12/2023 10:31

@xxnjr
Good summary…fair enough, you have had to draw conclusions based around current production. By the end of January, additional wells and the other water injector being operational should leave capacity above the nameplate with additional wells being drilled in the first six months which will leave the Company able to have production in reserve (according to Kosmos). I bet Tullow are kicking themselves that two injectors had pump failure after the low downtime percentages of the last few years. Tullow, will know from the logs what the new producers are likely to add to production. Strange to launch a tender offer for the bonds if there were further short term disappointments to come . Just sayin ! Private investors may like excitement but I know fund managers who “get off” on extremely high cash flow yields instead. At some stage in the near future, assuming oil prices remain stable, the shares have to react to the blindingly obvious …..in my highly biased opinion . DYOR