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Does anyone know when Tullow receive the $74 million for the Uganda FID? Could it be that they delayed the RBL as they will be getting this in February?
could get away without a dilution*
Beetham,
As it stood up until now, it was a close call for Tullow whether cash raise was needed or not. And it still could be (we don't know RBL yet).
But FCF for Y20 was -$70m (including the -$50m capital movements at YE)
Amongst other things (production, etc.)
It's possible that Tullow COULD get away without a cash raise if they get good value for their exploration assets.
As it stands, i'm not convinced that there is no requirement for cash raise.
On the plus side with every drop of the SP the chance of a rights issue becomes even less of a non starter than it was at 34p.
14p laughable....I will throw the kitchen sink at this If it goes anywhere near that level.
It's already in the load up zone.
No worries on RBL
It's January and the world is back in lockdown again, which is making doing any kind of business difficult. Everything is taking a lot longer to organise in lockdown. They all need a little extra time to complete!
Slift, I think it's more the case that over the last 2-3 weeks we have had investors steadily piling in hoping that the update we had yesterday was going to make the SP pop. The subsequent fall in SP (which you are correct when you say that it's overdone) is just those "prospectors" flooding out after the vanilla update. Some people hoped for/expected fireworks and, because they didn't get them, have headed for the exits. Personally, I'm expecting the SP to meander between now and the 15th March or so before steadily rising on the hope/expectation of the Suriname venture to produce. Now, would be a good time to take advantage of the depressed SP as it WILL be back above 33p by "Julius Caesar Day"!!!
I agree Tony I am now fully out here. Right now it doesn't matter about any fundamentals about the Oil price. .
Short term there is too much uncertainty and with major newspapers mentioning debt for equity swap its about cash preservation just in case of a wipeout similar to what happened to PMO.
Plus the shorters are fully back in control and could knock this back to 14p again.
The shorters are out in force today..!
Lap it up while you can..
Hope you ALL burn..!!
No cash raise needed Slift.
The rout in the market is continuing. Fortunately I reduced my portfolio by a third earlier in January. Some really good stocks are also getting hammered. This is not just about Tullow. Its about cash preservation.
"On the other hand slift the delay could be due to a simple issue."
Potentially, but no reason to delay on a simple issue.
Obviously Tullow are being careful about this and doing the RBL where it's most likely going to affect shareholders the least.
But as i said, lower than expected production + amongst other things are a contributor to the whole picture.
On the other hand slift the delay could be due to a simple issue.
It could be a number of factors to be honest and without inside knowledge noone knows.
Bugsy911,
Take a moment and think about what the RBL re-determination is.
And the reasons for the delay.
Yes, Tullow requested RBL early so that they are able to refinance by April.
But RBL has been delayed by a month, I have a potential list of reasons why it could have been delayed, but i'll let people do the thinking for themselves.
Having said that, I do think the drop is kind of overdone, but market could be fearing the worst. Less than expected production is a contributor to the whole picture.
Trying to panic everyone again with mention of rights issues and d4e swaps.
Nothing to see here the sensible shorters including pitcht are closing ... this is the drop to let them out so keep buying and put them under pressure as we're a few weeks at most to finally kicking this topic off the table.... remember we requested this early !!
At a pure guess, I'd say Tullow will have to raise approx. $200-300m somehow between now and April.
Hard to say without RBL, but just a pure guess.
Totally agree.
Tullow is in a totally different position to PMO.
Tullow has the money to pay off its 2021 debt commitments and they have high-quality assets to produce from to be able to pay off the future debt.
They will get the RBL done with no problems and they'll get an extension on the future debt payments.
Oil is in a bull market which should last for most of this decade. If Tullow can get the debt repayments extended towards the middle of the decade/ish, they should be able to repay with ease. Plus they may have a new oil discovery on top of that. Perhaps that was Goldman Sachs' thinking. Oil to get to $200 at the bubble - long way to go though.
And did Jubileey sell you one of their rose-tinted glasses for you to make that statement stuartv?
All the minions employed by the shorters for 50p a post are out on masse today.
the shorts will close 1st
This truly is following the same process to what crushed PMO
Peoples opinion now on a possible rights issue or debt for equity? Share dilution? Mathematically do we think it's possible to raise the outstanding balance without dilution in someway?