Tullow Oil Share Discussion Threads

[hojjat] 06/3/2024 08:20

They reduced cost and increased production.
Oil price was $77 on average.

Both production and oil price has been rising since the start of this year. Even 100000 bpd was achieved.

Share price should be much higher than this.

[xxnjr] 06/3/2024 07:57

Results rns sound positive but it's typical Tullow. Rahul pops up and production has miraculously jumped to over 100K. Will this be for a nano-second like last time? Kenya is still going to happen (in Rahul's world) as that avoids having to announce a massive right down.

Net debt reducing to $1,608m is good.
Financing costs remain stubbornly high $286m (2022 $293m).

"The Group’s total drawn debt reduced to $2.1 billion, consisting of $493 million nominal value Senior Notes due in March 2025, $1,485 million nominal value Senior Secured Notes due in May 2026 and $130 million outstanding under the Glencore facility."

as have borrowed $130m Glencore at SOFC + 10% (iirc) to pay down some of the 2025's

[subsurface] 06/3/2024 07:50

Kenya
On 1 March 2024 Tullow received a letter from the EPRA extending the review period of the updated Field Development Plan to 30
June 2024

[xxnjr] 06/3/2024 07:28

ref Namibia: Africa Oil + Eco + Ricocure have today just farmed of 57% of S.Afr 3B/4B to Total/Qatar Energy for a free carry on 2 exploration wells + cash. It's the same basin as Namibia.

[misca2] 06/3/2024 07:22

Outlook

After reaching an important inflection point in our business plan in 2023, Tullow has a strong and unique foundation to create material value for our investors, host nations and wider stakeholders and we look to the future with confidence.

We will continue to run our business with the same rigorous financial discipline, prioritising the highest returns and focusing on value-accretive investments. Our balance sheet will continue to strengthen as we further reduce our debt and optimise our capital structure. We have made good progress toward delivering our target of $800 million of free cash flow between 2023 and 2025 and given the quality of our resource base, the opportunity set ahead of us and a reducing cost outlook, we expect to maintain these levels of free cash flow generation in subsequent years.

With a strong balance sheet and this sustainable free cash flow outlook, our business will be well placed to deliver value to our shareholders through organic and inorganic growth and capital returns.

I thank our shareholders for their continued support as we realise value across the portfolio in 2024 and beyond.

[xxnjr] 06/3/2024 01:06

Not really "sold" as no cash received for Namibia. It was handed back. Our lucky one time junior partner couldn't believe their luck gaining that increased equity and quickly did a $100m farm in deal with Chevron. Not one of Rahul's brightest decisions!

Maybe selling Ceiba+Okume (EG) and Dussafu (Gabon) for $135m and then re-investing $118m of that into Ghana pre-empt wasn't the deal of the century either. Unless the sale was forced on Tullow by the banks doing the refinancing? Dunno.

[mcsean2164] 05/3/2024 23:19

Sadly, feels like it's too late. He sold off our assets in Namibia etc.

[alfiex] 05/3/2024 13:21

Well, it looks like nothing positive is coming tomorrow. We seem to be going back to the last days of Mcdade. Perhaps it is time for change of management?

[xxnjr] 03/3/2024 23:08

Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, said Sunday that it would extend cuts in oil production through June, noting that it was acting “in coordination with some” other states. Saudi allies including Kuwait and the United Arab Emirates said Sunday that they would also continue their reductions.

[subsurface] 02/3/2024 12:06

Africa press Kenya

More delays in Kenya oil dream as State holds up firm's exit plan

[subsurface] 01/3/2024 08:23

ECO Atlantic Report today

The Company received approval for the transfer of 60% Working Interest and Operatorship in the Orinduik Block, offshore Guyana, from the government.deal with Tullow completed.

TOQAP's decision to relinquish its 25% WI. As a result, Eco currently holds 100% WI in the Block.



Ghana's ECG cuts electricity to parliament over $1.8m debt

[subsurface] 01/3/2024 01:52

Kenya best left to firms like Caprikat and Foxwhelp just like DRC!
Tullow paid $500,000 for rights to the blocks in 2006 and sought legal action after they were re-awarded by presidential decree last June to previously unheard of Caribbean-registered firms Caprikat Ltd and Foxwhelp Ltd.that ended in court too
Deja vu ?

Things I want to know on Wednesday with thanks to gogadget on LSE

Progress of the tax dispute

Glencore lending facility terms and conditions

More accurate production guidance

Update on Kenya

Future plans on bond reductions

Future Plans to grow the business

Capital markets day scheduled

What the business plans to do about the terrible share price performance.

The current communications is just not good enough.

[xxnjr] 29/2/2024 17:51

To be brutally honest Alfiex I don't really believe Kenya Export by pipeline will happen. Total and Africa Oil wrote it down to zero and exited. That tells you all you need to know. Farm in discussions have also gone nowhere (so far).

[alfiex] 29/2/2024 17:41

You're right xxnjr Rahul has put too much faith in Ghana and it's not working. What is your opinion on Kenya, do you think any good will ever come of it?

[xxnjr] 29/2/2024 17:33

As far as I can see we've spent a small fortune drilling lots of wells in Ghana but the production gains promised by Rahul haven't really materialised on a sustained basis "at least so far" . Keep saying "at least so far" as I'd like to give Rahul the benefit of the doubt. But tbh it's getting increasingly difficult to do that. Results are what count. We still seem to be stuck at 90K on Jubilee despite the w/inj being fixed several months ago and at least 1 new producer being on stream "early in the quarter". If I see any evidence of production growth will let you know. In the meantime we need to diversify and reduce our over reliance on Ghana. Concentrating on Ghana appears to have been totally the wrong strategy. But one lives in hope!

Another point. All these new wells. Where are they? You might think JSE. But no! If you look at slide 13 of


only 2 producers in JSE against 5 new infill wells in the main field.

[mcsean2164] 29/2/2024 16:54

Death by a thousand cuts

[xxnjr] 29/2/2024 16:42

2.6m UT at 28.14p
market seems to have lost confidence here.

[subsurface] 27/2/2024 12:43

Thanks for posting XX

[xxnjr] 27/2/2024 08:48

Full fat version here :-)

Q (Charles Meade)

And then the follow-up question, along the same line, but in Ghana at TEN, can you give us a sense of -- so you've submitted a new proposed work scope to the government. Can you give us a sense of the timeline for whether when that might be approved and then acted upon? And order of magnitude, what it might -- what it might do to production at that field or that -- those fields?

A (Andrew Inglis)

I think the write-down on TEN was fundamentally around sort of a couple of issues. The first was the well performances of recent wells have been drilled. They haven't delivered quite what we'd hoped. And then, confidence around the future work program, which would require approval from the government in terms of the plan of development.

So as of today, we haven't included any significant future work scope in TEN. And equally well, if there was a breakthrough on the PoD, that capital expenditure would have to compete for capital within the framework that we set out in our prepared comments. So I'm comfortable with where we are today. Predicting when the PoD could be approved is tough. There's clearly looking at an election year in Ghana. And I think that makes life a little tougher to be confident about when and if things might happen.

But I think the most important thing from a Kosmos perspective is actually, as we've commented earlier, very rich hopper set. We've actually got a very rich set of opportunities in the base between Equatorial Guinea, Gulf of Mexico and actually Ghana in Jubilee. We actually -- the reserve replacement ratio of 104% this year was driven by the performance of Jubilee more than offsetting the downside in TEN. So there is a strong opportunity set there in Jubilee. Jubilee is a field -- a big field that's going to get bigger. And therefore, I can see us prioritizing capital there. So TEN is sort of waiting, and I'm fine with that. I think for us, it's about ensuring that we're putting our base capital to our best opportunities. And certainly, Jubilee would run very highly.

Q (Matt Cooper)


So just firstly, I wonder if you could comment on the current Jubilee production rate and other two wells brought online in 1Q performing per expectations.

A (Andrew Inglis)

Yes, Matt, sort of step back on Jubilee, I think the key points to note are performance in the year will be dependent on two issues. The first is maintenance of the base, which is about voidage replacement. We struggled to do that, really in the third quarter of last year, but really from about sort of November time onwards, we've been injecting water at record levels, and they've been at 100% voidage replacement, probably in the prior three months of that, it was as low as 40% when the water injection was down. So I feel good about the way that the base has been performing as we enter the year and actually have sort of been through the first two months.

Then you're sort of adding additional well stock. We've added one water injector and one producer. I think literally, probably today, we're adding the -- second producer will start up. So once that second producer is online, we'll be up at around sort of the 100,000 barrel a day back up above 100,000 -- we're around 100,000. So that's an important milestone for us. Then you've got two more wells to follow. So you've got an additional producer and an additional injector.

So as we look to the year and the performance in the year, I think the wells have delivered. We're actually -- when you look at the overall program, the operators would probably deliver the wells six months ahead of time, which is why we're going to take the break and slightly earlier than we'd anticipated to allow us to rebuild that well still. But the fundamental thing to sort of we're focusing on is the water injection and therefore the voidage replacement that sustains the pace.

Q (Matt Cooper)

And just to confirm. So those first two wells, I think you said they went in early 1Q. The injection and the production that you're seeing from those is in line with expectations at the moment?

A (Andrew Inglis)

Yes, it's in line with expectations. And you can -- yes, they're in line with expectations. The base is probably a little bit better than we saw but fundamentally in line with expectations. So then with the second well, second produce starting up now. The objective was to be above that 100,000 barrels a day and that's what we anticipate to be.

So yes, it's -- the start of the year has been solid, yes. And the key thing, and I keep bashing on about it, but getting the base properly supported is the key thing that we need to focus on.

Q (Mark Wilson)

And also, are you assuming a return of a rig to Jubilee in 2025 and onwards? That's the first question.

A (Andrew Inglis)

So if you sort of conceptualize it yes, if you look at the base and the maintenance of the base, we're looking at three quarters of a rig year in Jubilee. Now clearly, as it were that being sort of rollover. So yes, the rig would return in '25, would maybe drilling '26, and then a break and so on, yes. If you sort of figure it out that there's probably three quarters of a rig year that makes sense, whereas actually this year, we'll have sort of half of a rig year in Ghana.

[xxnjr] 26/2/2024 20:16

Hi folks,

I'm listening to a recording of the Kosmos call. On TEN 'POD' apparently it's an election year in Ghana which may complicate approval of the 'POD' "if and when that happens". Even if approved KOS emphasized that TEN "would have to compete for capital" in their opportunity rich portfolio - hence they have written TEN down to Zero - suggesting their priorities may lie elsewhere. (TLW have 55% of TEN.)

KOS were more optimistic on Jubilee "big fields get bigger". Good opportunity set which would compete for capital within their existing portfolio. KOS guidance "as per the operator".

2nd Q..... how are the new wells on Jubilee performing?

Performing "as anticipated" was the diplomatic answer. Have added 1 x prod and 1 x w/inj earlier this qtr with a 2nd producer on line imminently. This 2nd producer should take us back to c.100K or a tad over. The problem we had in 3Q last year was we were only replacing about 40% of voidage but current w/inj levels very high with 100% voidage replacement which should maintain base production with a further 1 w/inj + 1 x producer to come before rig leaves.

3rd Q..... rig time in Ghana?

2024 about 1/2 rig yr
2025/6 about 3/4 rig yr spread over both yrs.
all on Jubilee. Nothing on TEN it seems.

[bootycall] 26/2/2024 14:13

Brevarthan research report, in my opinion, appears incorrect for 2024 production estimates judging by the operational update today from Kosmos. We will have more granularity post the 16:00 GMT conference call. Even with the delays in bringing on Jubilee SE and the breakdown of two injector pumps..cal 3Q and 4Q gross was 95,900 and 92,400 kbopd respectively. Now water injection can support increased production we should see stabalised production rates of between 100-115kbpd. Managing a waterflood reservoir in a conservative way, means not always running the field flat out.

The principal reason for waterflooding an oil reservoir is to increase the oil-production rate and, ultimately, the oil recovery. This is accomplished by "voidage replacement"—injection of water to increase the reservoir pressure to its initial level and maintain it near that pressure. Brevarthan Research seems to be spinning increases water production as a negative. Maybe they should have a rethink ! :)

[xxnjr] 26/2/2024 10:41

If it were me as CEO I'd be running the numbers over a possible fallback position where the TEN fpso lease is terminated and any remaining TEN oil is produced via the Jubilee fpso. ofc bootycall you will say I'm mad but I would still ask the guys to run the numbers as part of the companies scenario planning!

[bootycall] 26/2/2024 10:03

So a reserve upgrade on Jubilee 1P reserves more than absorbs downward revision for Kosmos who have had a less conservative policy in the past on reserve recognition to Tullow !
Ten must be more complicated because at current low rates of production the FPSO is substantially underutilised and profitability must be marginal . The good news is that the FPSO will show a substantial reduction in lease costs in mid 2026 to the tune of $70m per annum as it migrates off its original 10 year charter to 1 year extension options. Up until that date the partners at Ten want assurances about payment from the Ghanaian government before committing to gas sales, which is sensible as the major asset to be developed is a condensate field. Somewhat ironic I must admit that you write down an asset where you have substantial reserves with a development plan in place because of games being played by the host Government in negotiations. All that lost revenue to a country that badly needs these reserves to be exploited. If the asset had negligible value consistent with a reserve write off would Kosmos be seeking to participate in a new well programme ? I think not. Ten is a very valuable asset and I look forward to both sides finding a sensible solution going forward.

[subsurface] 26/2/2024 09:50

Hi Zingaro,
Its been very difficult to maintain production numbers at Jubilee given that the nameplate capacity of the FPSO is 120,000bbls/day,we did peak a few months ago but not for long just over 100,000 bbls
We need the drilling rig at Ten Capacity 80,000bbls/d delivery circa 18,000bbls/d
or is TEN a lost cause? and drilling is expensive..
Gas production is risky Ghana seem to have difficulty keeping up payments.

[zingaro] 26/2/2024 09:01

Does the Kosmos report affirm the bravarthen research viewpoint posted by you ? Perhaps that would be a reason to let the drilling rig go early (reported by xxjnr on the other forum).