Tullow Oil Share Discussion Threads

[jerc] 18/4/2011 15:44

Never ceases to amaze how much money's spent on advisors and accountants to broker deals properly.......and things STILL end up in court.

[mccracken227] 18/4/2011 13:16

i think you are right there ringer, it seems as though this never ending Uganda deal has really gone pear shaped, and the share price is the result!!!!

[ringer12] 18/4/2011 11:53

Ah yes. Should take another two or three years to sort out! .It would be interesting to know the total lawyers fees for sorting out this debacle.

[sillyname] 18/4/2011 08:05

Heritage Oil PLC (HOIL.LN), an independent upstream exploration and production company, said Monday it, and its wholly owned subsidiary Heritage Oil & Gas Ltd., or HOGL, have received particulars of claim filed in the High Court of Justice in England by Tullow Uganda Ltd. seeking $313.45 million for alleged breach of contract.

MAIN FACTS:

-Alleged breach is a result of HOGL's and Heritage's refusal to reimburse Tullow in relation to a recent payment made by Tullow of $313.45 million to the Uganda Revenue Agency, or URA.

-Heritage and HOGL believe that the claim has no basis and will vigorously and robustly defend it.

-Heritage and HOGL have also reserved their other rights against Tullow and against the Government of the Republic of Uganda.

-The URA purported to issue Agency Notices under the Ugandan Income Tax Act designating Tullow, as agent for HOGL, for payment of an alleged tax liability resulting from HOGL's sale of its interests in Blocks 1 and 3A to Tullow.

-Sale completed on July 26, 2010 for $1.45 billion, including $100 million for a contractual settlement, of which HOGL received $1.045 billion in cash.

-URA made a purported demand that Tullow pay $313.45 million under the Agency Notices and Tullow has informed HOGL that it paid the entire amount to the URA on April 7.

-Tullow is purporting to claim against HOGL under the tax indemnity provisions and against Heritage under the guarantee provisions of the sale and purchase agreement between the parties dated Jan. 26, 2010.

-HOGL is now pursuing the release of $283.45 million plus interest, held in escrow with Standard Chartered Bank in London, following Tullow's admission that its payment of $313.45 million to the URA has discharged HOGL's alleged tax liability.

-Funds no longer need to be held in escrow, since monies were placed in escrow on completion of the sale to provide for a potential payment to Government/URA in discharge of the alleged tax liability relating to the Sale, where this alleged liability was duly resolved between HOGL and Government/URA.

-Heritage and HOGL continue to review their options to recover $121 million held on deposit with Government, which could include commencing arbitration proceedings against Government in London in accordance with the provisions of the Production Sharing Contracts for Blocks 1 and 3A.

-Heritage shares closed Friday at 270 pence valuing the company at GBP769.12 million.

-By Ian Walker, Dow Jones Newswires; 44-20-7842-9296; [e-mail]

[niceyman1] 15/4/2011 07:30

Chart looks like we are set for bounce!

[85gary] 15/4/2011 07:27

I guess it is like different peoples reactions to situations when you have conflict with a neighbour. You can argue and never give ground achieving no result to the problem, or you can think laterally, negotiate, and think around the problem, to get the solution you want? Potential ahead outweighs problem faced today?

[ben chod] 14/4/2011 20:12

it seemsthat way on the face of it but i think its strategy bigger fishtofry

[ringer12] 14/4/2011 14:41

Why should Tullow pay CGT on their purchase of the Heritage stake. They kept saying in the past that they would not pay it.

[5mally] 14/4/2011 14:27

If you go by company size then Total will get operatorship, total is about 6 0r 7 x total's market cap
Tullow have relatively little experience and industry knowledge in pipeline construction or refinery construction so perhaps they get to operate the fields under operatorship of either CNOOC and TOTAL,
if its political then i think CNOOC will get the title, better to be in with the chinese!!
all in my opinion..

forgot about the ex div of yesterday. cheers

[85gary] 14/4/2011 11:35

5mally, interesting read. I'm hoping Tullow can formerly present FDP during review period, otherwise we may get leaks if government disagree etc., Tullow have certainly acted with dignity throughout this process and appear to be accelerating drilling in line with expectation. Opinion seems to be split on whether they are best suited to take the lead to production? Good with the drill bit but relatively untested going further? Suffering today even after good news of Tweneboa-2... bit more than I expected ex dividend hopefully just general market weakness?

[5mally] 14/4/2011 11:14

perhaps this - and could it be enough goodwill to secure the operatorship licence over the 3 blocks?
KAMPALA, Uganda (Dow Jones)--London-listed Tullow Oil PLC (TLW.LN) has paid $469 million in taxes to the Ugandan government emanating from its takeover and subsequent part-sale of Heritage Oil PLC's (HOIL.LN) interests in the country, Uganda's Central Bank said Wednesday.

The payment is part of the capital gains tax levied on Tullow's $1.45-billion purchase of a 50% stake in blocks from Heritage, and its $2.9-billion sale of stakes in blocks to French oil major Total SA (TOT) and China's CNOOC Ltd. (CEO), according to Elliot Mwebya, the Central Bank spokesman.

"We received the payment last week, and we expect it to improve the sentiment of the local forex market," he said. "This is a substantial amount and it should be able to ease the stress suffered by the local currency in the past few months."

A Tullow spokesman said that the company had paid $313 million based on the potential tax liability associated with Tullow's purchase of Heritage stakes as well as $14.5 million stamp duty on the deal.

"When the farm-down to CNOOC and Total is completed, Tullow will pay 30% of its disputed capital gains tax bill which will be $142 million. This gets you to the total payment of $469.5" he said.

The Ugandan shilling has depreciated around 18% since late last year, with trade officials placing the blame partly on Uganda's $744 million purchase of fighter jets and military hardware using Central Bank reserves. Military officials say that Uganda needs to increase security ahead of the commencement of oil production in the Lake Albertine rift, which borders the restive Eastern Congo.

Following the tax payment, the government is now expected to complete reviewing Tullow's development plans for the oil basin, with final approval for development expected in the middle of this year, a government official told Dow Jones Newswires.

"Government is also close to deciding on the operatorship of the three blocks," he said, adding that these decisions would be fast-tracked to ensure the production timetable remains on track. Uganda is expected to become an oil exporter by late 2016, with peak production likely to hit 350,000 barrels-a-day by 2018, according to Tullow, which said Wednesday it had reactivated its exploration drilling program in the country.

Uganda has levied at least $900 million in total taxes from Tullow's two transactions. However, Tullow challenged a $472 million assessment on its $2.9 billion sale and the dispute is expected to be resolved through a tribunal in the next 12 months, company officials say.

nai, dyor

[eipgam] 13/4/2011 17:33

an end of day plummet.... must be a reaction to something other than the discovery. A big sell order placed maybe?

[ringer12] 13/4/2011 17:03

Ah yes. The typical reaction to a successful TLW drilling operation.Perhaps a delayed rise tomorrow!

[5mally] 13/4/2011 12:21

good news out today on
News Release


Tullow Oil PLC (TLW.LN), the oil and gas giant, Wednesday announced that the Tweneboa-4 appraisal well in the Deepwater Tano licence offshore Ghana has successfully encountered gas condensate in good quality sandstone reservoirs.

MAIN FACTS:

-Results of drilling, wireline logs and samples of reservoir fluids have confirmed the western extent of the Tweneboa gas condensate accumulation.

-The well, located 3.9 kilometres southwest of the Tweneboa-2 appraisal well was drilled in the western flank of the accumulation to complete the appraisal of the Tweneboa gas-condensate discovery.

-The well encountered 18 metres of net gas condensate pay in high quality stacked reservoir sandstones which are in static pressure communication with both the Tweneboa-1 and Tweneboa-2 wells.

-Commencement of a major exploration and appraisal campaign in the Lake Albert Rift basin, onshore Uganda.

[gdasinv2] 13/4/2011 09:25

Oilex prepares For Key "Proof Of Concept" Well In Gujarat


This is a critical time for AIM- and ASX-quoted Oilex, which over the past two years has reinvented itself as the potential of a tight gas play in India has come to dominate its business model. Next month will see the spudding of the Cambay-76H well, a key "proof of concept" onshore well in the Cambay field in Gujarat, India, which will put to the test Oilex's understanding of the over-pressured low permeability Eocene reservoirs.
The Black Pearl Rig is now being mobilised to the field, ready to spud the well in May. Drilling into the extensive tight Y-zone reservoir that extends across the 161 sq km Cambay contract area will include a 610 metre lateral section, to be followed by an eight stage fracture stimulation and a two month production test. The successful application of the horizontal drilling and multi-stage fraccing that has proved so successful at unlocking tight gas reserves in the US will be the key to de-risking the project and a potential catalyst for a significant re-rating of the Perth-based small cap. Reservoir deliverability and post-frac flow rates will be key factors in judging the success of the well.

May should also see the release of an independent reserves certification for the Cambay field from Netherland Sewell Associates Inc, which has expertise in North American tight reservoirs, some of which have similarities to the Cambay field. Tight gas has been a complete game-changer in North America, not only for early entrants in the shale business but also for the entire US energy mix. Oilex has spent much of the past year re-thinking its Cambay model in the light of the US shale experience, working with North American tight gas specialists Morning Star LLC and NuTech Energy Alliance to better understand these low permeability reservoirs.

Even before the drilling of this key well, Oilex was able to provide a thick data package to NSAI, drawing on existing 3D seismic and extensive well data. Oilex's in house numbers point to net P90 reserves of 248 billion cubic feet of gas and 11 million barrels of condensate, P50 reserves of 384 bcf and 17 million barrels of condensate and P10 reserves of 591 bcf and 27 million barrels of condensate. The dual-listed company, which has a market cap of £62.5 million, has a 45 per cent interest and is operator of the Cambay field, with Gujarat State Petroleum Corp holding 55 per cent.

Analysts at Ambrian Oil & Gas are excited by the approach of this key well. "Being located in the heart of Gujarat, one of the most industrialised states in India, the Cambay 76-H 'proof of concept' well is important not only from a bottom-up stock-specific perspective, but also from a regional gas supply perspective," said Ambrian, which rates the stock a BUY with a target price of 38.5 pence. "If Oilex is able to demonstrate reservoir deliverability, achieve a commercial post-frac flow rate and open up a new tight gas province, we anticipate a dramatic change in value in the order of several multiples of today's levels."

Shares in the company were trading at 25.8 pence on Friday.

[no bull shit] 12/4/2011 10:35

take a look at Regal Pet (RPT) again, broke out as soon as it was taken over and would double in no time with the reinstatement of licences and production mucj sooner than you think. last time I mentioned these they broke out from 42 to 57...get in while the price is below 50p..

[eipgam] 07/4/2011 16:51

Hmmm... 'the people have no bread!'.... 'let them eat inter ballistic missiles and tracer bullets?'

[5mally] 07/4/2011 15:34

and this is what the tax is spent on!!
KAMPALA, Uganda -(Dow Jones)- The Ugandan government has procured at least eight fighter jets and other military hardware worth $744 million from Russia as it prepares to start oil production in the Lake Albertine rift basin, along its western border with mineral-rich but restive eastern Congo, government officials have said.

The jets and military hardware will enable the country to deal with any "eventuality" relating to rising security threats, Kabakumba Matsiko, Uganda's information minister said Thursday.

"Every country needs to be well equipped to defend its strategic interests," she said.

The initial payment was made around December last year, and according to intelligence sources at least $446 million has so far been paid.

Intelligence officials say Uganda is facing rising threats from the impending secession of Southern Sudan from Northern Sudan in July. Southern Sudan has already accused its northern neighbor of arming militias in the oil-rich disputed Abyei region. Uganda has traditionally been an ally of the South.

Uganda is also fearing possible incursions from the lawless eastern Congo, which borders its oil region, where U.K.-based Tullow Oil PLC (TLW.LN), France's Total SA (TOT) and China's CNOOC Ltd.(CEO) are preparing to start on a $10 billion investment project to develop the country's oil fields this year.

The Ugandan army is already constructing a new army base, in Hoima near the shores of lake Albert.

Last week, the Ugandan president asked ruling party law makers to approve the cost of the fighter jets retrospectively as a supplementary budget, when it is presented in the house. But opposition law makers have described the procurement as illegal, accusing the government of draining the reserves at the central bank without parliamentary approval, according to Nandala Mafabi, the head of the public accounts committee in parliament. People familiar with the situation say that the reserves are expected to be replaced by proceeds from taxes on recent oil transactions, involving Tullow, CNOOC, and Total.

Last week, Tullow announced that it would pay at least $469 million to the Ugandan government as tax-related payments, as a result of its takeover of Heritage Oil PLC (HOI.LN) stakes in the country, as well as the sale of a third of its interests to CNOOC and Total.

[eipgam] 06/4/2011 09:56

Thanks 85G.... judging by the amount of money swilling about all over the place, I would say that it is a knocking bet that the oil reserve estimates will soon get a significant increase. imho

[85gary] 06/4/2011 08:43

Mr Onek's version as given to parliment follows below. 4th from last, and last paragraph caught my eye.



Uganda to get $430m from Tullow oil deal
Tuesday, 5th April, 2011
E-mail article E-mail article Print article Print article
Onek (left) and Katikamu North MP Eng. Abraham Byandala leaving Parliament yesterday

Onek (left) and Katikamu North MP Eng. Abraham Byandala leaving Parliament yesterday

By Cyprian Musoke
and Joyce Namutebi

UGANDA expects to receive up to $430m (about sh1 trillion) from the first transaction of Tullow's acquisition of Heritage assets, Parliament heard yesterday.

Energy and mineral development minister Hillary Onek said the country would also get up to $475m on the second transaction of TOTAL and China National Offshore Oil Corporation (CNOOC) acquisition of part of Tullow's assets.

This was contained in a statement Onek read to Parliament yesterday on the sale of Heritage Oil and Gas Uganda's interest to Tullow Oil and Tullow's subsequent partial sale to TOTAL and CNOOC.

The Government, he added, had consented to the conclusion of the commercial and business transactions related to the sales and that Uganda Revenue Authority and the finance ministry were handling the tax aspects on these sales.

Onek also said the Government had agreed to Tullow's buying of the entire interest which Heritage had in exploration areas 1 and 3A of the Albertine Graben. Heritage had a 50% share in each of these two exploration areas, he said.

He added that the Government had also consented to Tullow's subsequent sale of 66.6% of its interests in exploration areas 1, 2 and 3A to TOTAL and CNOOC, after acquisition of Heritage's interests.

"The result of these sales is that Tullow, TOTAL and CNOOC will be joint partners in the three exploration areas and they will each have 33.3% share in each of these areas," he noted of the complex sales that confused many MPs, prompting a barrage of questions. Onek said exploration area 4B and 5 remained licensed to Dominion Petroleum and Neptune Petroleum as sole licensees respectively.

Completion of the sale, he noted, had enabled the country to attract more companies in the oil and gas sector. He, however, said the sales were not for the actual oil and gas resources, which had been discovered, but were sales of the companies' interests in the licenses they have in the country.

Onek further noted that the costs of these acquisitions would not be paid back when the production of oil starts.

"The costs which are to be recovered are only those which the companies are spending on the actual work like drilling of wells," he said.

MPs complained of tax disputes between the companies that were reportedly before London courts, in which they feared government would lose huge sums of money from its natural resources.

However, Onek assured the MPs that the agreements had been renegotiated and every case would be arbitrated in Uganda.

[mpclag] 06/4/2011 08:32

Looks like UG is getting its house in order for future oil revenues. Trying to provide the proper legal framework and future clarity-bodes well for the future.

[ayl30] 05/4/2011 17:50

Mixed emotions if there is a bid. had this for years and it keeps going up, well over a 10x bagger despite me selling down some to free up capital.
Still has far to go inmo but a bit at a premium to current level would frre up more cash - to put in BP / Cairn and some smaller oilers - both of two mentioned seriously undervalued I think.
Have made good money out of juniors in last 6 months, with oil price still going up I think opportunities will continue

[ben chod] 05/4/2011 17:43

we are not for sale



Tullow Oil Plc (LON:TLW) has been maintained at 'Overweight / Neutral' and a target share price of 1560 has been suggested.

There is therefore a potential upside of around 7%.

Our last quote on Tullow Oil is 1467.

[acamas] 05/4/2011 10:37

I believe it is almost certain Tullow will become a takeover target. Independent oilers do not normally live long in the FTSE100 if you look back over the past decades Ultramar, Burmah, LASMO etc