We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Auson
I’m sorry but I think you’re confusing with someone else... I’ve never mentioned anything about sulphur...
what is the investment case you are making with APIs and sulphur.... they might matter for some people but I genuinely don’t understand how this impacts investment decision in sea lion or OCTP... could u let me know if I’m missing anything here?
Tacotaco,
Just pointing out a few things, you said your no engineer but...
You also said 2 days ago the sulphur percentage doesn't matter as it can be cleaned. ( I think it does matter, brokers and market seem to think so too )
You said OCTP was shallow water and Sealion was deep water ( Sankofa is almost twice the water depth of Sealion. OCTP sankofa 866m, Sealion 450m )
Oh and you joined LSE on the 4th Nov 2019 or last week in old money.
Auson No... as long as Vitol are happy to offtake the oil im happy with the project... PS: they are contractually binded to do so...
This is the main reason for an investment case and not API ...
Could you please let me know what the point in all these technical questions? how will they help you in making an investment case.
Share valuation of Tullow should not be based on PE rate. The multitude of assets in the ground which they have a percentage of gives its own value. So the entire west Africa portfolio alone has a value and most models at $55 a barrel of oil probably gives $7.25B. This covers the company debt and hence why they can rollover some of it over time. However they need to discover new oil of similar quality to replace their resources and reserves used. At 150p share price it trades at 0.72 of its book value. If PE is used and normalised against huge oil companies it would trade at 0.30 book value on that model which is not the way to value a mixed company like Tullow which is both explorer and producer working in partnership with other companies. Another factor is future oil price either up or down which has a big impact on the share price. At 144p the value taken off was $750M. So the question to ask is whether it was reasonable in having two wells downgraded and $50M in lost net cash flow. I thought the value of the two wells added 25p to the share price. Takes us to 180p and then perhaps 1/8 is taken off because of cash flow which gives 157p. I certainly welcome other valuations being given.
i rarely trade in the hour before US markets open. this could go either way. 148.50p is pivot point hope that helps!
Tacotaco,
I'm not suggesting anything, You said Sealion is deep water and OCTP is shallow.
Sealion is not deep water.
Do you know the API of the crude at OCTP ?
Auson what are you suggesting and what are you trying to get to... ?
I think you are oversimplifying things... unfortunately i dont have answer to your technichal question as im no engineer and i also wouldnt wanna just google and throw the first number that show up in my search to justify my point.
My opinion is mainly based on info i gather directly from stakeholders with skin in the game.
Anyhow you do know that Diamond Offshore only does deepwater right? you've kind of mentioned it in a previous comment...
OCTP is right of the Coast of Ghana... Sea Lions in the middle of nowhere... We've sanctionned billions for dollars in Ghana and all based on Low cost, shallow waters drilling ... we do not touch deepwater... i really hope we haven't messed up royally!
Sorry if i sound harsh
Mrd do you have a stop loss mind...
I cant take this more im thinking of getting out!
1.38 ish i reckon
New low been set. Ah f me. Down so much.
Tacotaco,
Is that really all you know ? Ghana is shallow water ? Sealion is deepwater ?
OCTP Ghana block water depths range 600m to 1000m
Sealion water depth 450m
Let it test the low again. See if it holds. Then market knows where to move up from. Soon the iis will stop sellin.
biochelm.
Yes PMO is much cheaper, Mrd5432 and myself know it well. So does the market, banks, hedgefunds, traders, shorters ! etc.
Lots of other metrics need to be looked at EV to EBITDA NAV, FCF, 2C 2P Also if you add lease liabilities to net debt, it increases the net debt to EBITDA there significantly. Same with Enquest, especially when you take out the OZ loan.
Mrd... Reserves dont matter if you cant make a profit bringing the stuff out.
Auson... no idea about depth all i know is that all ghana offshore drilling is in shallow waters
Yes but look at our 2p 2c reserves. Oil in the ground.
Tlw P/E ratio 30.03
Pmo P/E ratio 9
Tacotaco,
You make some good points there, whats the water depth on Ghana offshore ?
I worked on OCTP project in 2016 when we sanctioned it. Mainly reason why banks were on board was because:
- Ghana offshore is shallow water much lower cost than deep water. (i remember our model showing repayment of our loan at $16bbp in downside case scenario).
- if it werent for vitol pumping in equity this would probably not have been sanctioned; Vitol has enormous leverage over lenders , they are also offtakers under the deal and the primary source of repayment of the loan.
- i can assure you if it werent for Vitol we wouldn't have sanctionned this and UKEF would not have participated in this on its own.
It takes more than 1 party to get complex projects sanctionned... FPSO builders dont carte about Oil price they just wanna secure long term leases, banks and equity holders do and for that reasons if the price is not right they would not jump into it. $60/bbl is not sufficient to sanction this especially in an environment companies are have massively cut down on CAPEX and focusing of returning cash to shareholder... look at Shell, planning on paying $15bn in dividend and $10bn in share buyback while keeping CAPEX at around 20bn down from 40bn in 2013... this is industry wide trend and the money aint there for now.
Carapa news in? No back to the bunker. Wake me up between 175-200p.
Tacotaco, Lack of financing are you sure ?
UKEF recently funded $1.5bn to develop Ghana offshore oil and gas. They used the same Broker/ lawyer that Premier Oil are using.
https://www.natlawreview.com/author/oliver-irwin
Premier Oil Sea Lion Development — representing Premier Oil in connection with the proposed project financing of the Sea Lion offshore oil field development in the North Falkland basin
Financing of Vitol participation in OCTP oil and gas field — representing IFC, UK Export Finance and eight commercial banks in connection with the $1.5 billion financing of Vitol’s participation in the development of Ghana’s Offshore Cape Three Points (OCTP) oil and gas field. This multi-sourced quasi project and reserve-based lending (RBL) financing also included a Multilateral Investment Guarantee Agency (MIGA) covered facility and benefited from complex World Bank support arrangements in relation to the gas offtake. The project’s overall cost of approximately $7 billion represents the largest foreign direct investment in Ghana’s history, and UKEF’s largest direct loan to date.*
I don't like you heardy. go away.
Kerplunk been way overpriced for ages, reality setting in now, would have been this low months ago if it hadn't been for the divi which they obviously can't afford now. Wouldn't touch it with a bargepole jmho.
consolidation day. a few more then hopefully a proper rise.
Mfrs took all hope away of a recovery. Only capara can save the day now