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"It is a game changer - but not in the way most people seem to think. We are exchanging an asset for cash, this is not new money."
This benefits Tullow in more than one way. Uganda was a very big project and had a very big financial burden for a small player like Tullow.
The Uganda project whilst has billions of reserves, it also has a breakeven of c. $50/barrel. This project isn't even viable in the current environment, which might be why CNOOC didn't pre-empt rights? Total obviously has a different view and expects oil price to be in excess of $50-60/barrel when the project is completed in 2023ish? and thus making it viable when complete.
Either way, $575m in the current oil environment for a multi billion pound CAPEX intensive project with a breakeven of $50/barrel, human rights violations and environmental issues (due to pipeline) is not that bad of a deal IMO. Not to mention that Tullow will have less CAPEX commitments going forwards which will help Tullow to explore and develop other assets.
Also one less (very difficult) african government to be dealing with!
Sure we could have gotten a better price for these assets at a higher oil price, but unlikely that Tullow will be selling any assets at higher oil price.
ALL IMO.
Some of them have been shorting since as high as £2 so even a significant rise will not bother them in the slightest. I said it before and stand firm greed got the better of all of them they should have tried to close out at 7p, the thought of not having to buy back in at all was just too juicy a prospect at the time. We have made great progress since the lows and I see the SP and even interest on the boards here show there are plenty of people now more confident to buy on the dips. Confidence these days is hard to build but Rahul hasn't put a step wrong yet IMO. I complained about the lack of news for a while but I can't think why any long term holder wouldn't be more positive now than they were in March. I held firm with Indivior recently and it paid off and I believe a similar hold here will eventually pay off, problems still to resolve there's no denying but so far so good.
Totally agree Scrod, I would imaging that most if not all will have made a lot already on this so hopefully, their interest wanes on more progression over the next few weeks.
I also agree about the RNS's being ignored. I thought when they appointed Rahul it as a great bit of business, but on the day it was released and the day he started I'm sure the share went down on both?
Davstock, short interest will only fade when we are out of the woods. Arguably they have controlled the free-float here for nearly 18 months and some will and have doubled down on their bets. If they are wrong then some of them (if not all of them) are likely to get burned because on current volume if they needed to buy back in quickly it will be one big scramble, equally they could be right as nobody can at this stage say TLW is safe and in perfect financial health or likely to be soon. IMO a successful CMD could easily persuade larger investors than you or I to take the opposing bet. A steady trickle of positive news will see short interest waiver, as it's not a dogmatic principled position here as these are not green crusader funds as far as any of the shorts are concerned, purely taking advantage of a current and obvious weakness.
As I said weeks ago take each RNS as it comes, all of the biggies I listed today in another thread when/if we tick them off, collectively together they will equal a re-rate and most if not all could potentially be covered by as early as January 2021. Uganda is a step forward, there have been others that have also been ignored by the market, CEO appointment and RBL determination being 2 of the others.
I would imaging at least the 300 million that's due next year. But what it does is give them back is control and leverage and more options now.
How much of this £500m will go directly towards debt (without TLW having a say in the matter) ?
What yesterday's news did do for shareholders was for the first time since Dec they can forget about the stock and not worry it's going to go out of business tomorrow or the next day!
They have bought themselves almost 2 years to come up with a new plan!
You will see the big change, when the money hits the bank - its just excellent news at the moment, without the deal being finalised, the money in the bank will be the big game changer!
It has become a trader's share , we will see a sustainable rise when price of oil increases .I agree that Ugandan deal is a game changer.
It is a game changer - but not in the way most people seem to think. We are exchanging an asset for cash, this is not new money.
For me it's a gamechanger in the sense it gives us time and breathing space to turn the company around - basically we can survive longer in the current climate.
I honestly see Uganda news as a gamechanger for TLW but the market seems to disagree?
The deal now looks a far better deal than it did back in April. You have to look around the industry and see there's not a lot of companies completing on 500 million deals just now!
Look at PMO, they tried everything to get a similar amount of money from many different avenues, but had no joy.
Tlw managed to do the deal without selling any producing assets or go to the investors for it.
Doing a deal like that in this present moment in time is like finding a needle in a haystack!
JMAX, never a truer word spoken.
If it looks cheap then you buy. If it gets cheaper still and the nothings changed then if you have the funds you might buy more.
Then just be patient.
If you can't be the latter then you will probably get robbed of all your shares and lose money.
City loading up Davstock and pay no attention to those shorter lists as they are never a true reflection of things.
You could take out a 0.5% short in conjunction with say 3 other institutions so 2% in theory between all 4 but behind the scenes, and as the buying threshold for notifications is 3%, the same 4 institutions could have purchased and be holding just under 12% physical stock between them and nobody would be any the wiser. A fairer, more equitable situation is that the same thresholds would apply for holding shares and also for any "long positions" for which their is no such similar notification system to that for shorts. They are used as a smokescreen and that is why most of the time they don't move or it is only fractions of a percent. Shorting stock should in all honesty be banned as is the case in some other countries.
The Ugandan assets sale and what will ultimately be a debt reduction of $575 million and a near 20% cut in debt is worth more than 2p.
It was 30p and 40p only recently on far less good news and on oil price far lower than we are presently sitting at.
Dav,
The stock market isn't a level playing field - so never expect true value, fairness or justice, because if 'you' do, more often than not 'you' will lose money.
It's getting a bit depressing that it comes out with the most positive news it's had in the last year and it's at the same price it was 2 weeks ago.
It's reached No.2 in the shorter list in the UK, which in a world crisis shouldn't be allowed?
The unfortunate thing this time though Davstock is that though you will get some on here tryong to will it lower for them to buy back in, the vast majority of people know that TLW is in a far better financial position post the successful RBL re-determination and now with $575Million confirmed as coming TLW's way also. That is worth far more than the measly 2p on the share price.
There are many traders on here but its starting its turnaround under the new CEO and all the early signs are good so some might just be staying put. I am.
It is about due a double your money run again imo
When there is a good chance the fund's completion RNS could drop tomorrow and Brent taking a step up now, this is getting totally manipulated.
we're drifting lower again...
Down again in anticipation of the funds hitting the bank account.
It happened on Tuesday before the news came out yesterday. This tactic has been happening for months.