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@Jubilee...do you honestly believe that Slift one vote for the UG sale was the straw that broke the camels back!
If anything you're the one who keeps spitting your dummy out about UG.....as the famous Frozen song goes.."Let it Go!"
RNS OUT :(
All looking good on the TLW front. Just smoke and mirrors. Past sellers trying to spook nervous investors so they can buy back in at a cheaper price. Listen to the markets.
https://www.boerse-frankfurt.de/bond/usg91235ab05-tullow-oil-plc-6-25-14-22
Cuz you earn it. We lost a hundred or two hundred millions because we didn't time properly the sale of Uganda. Maybe you shouldn't have been so vocal about it? You screwed us once, but I am glad you sold and that you are missing the recovery. Keep sucking your thumb!
"wtf are we doing giving freebies away and lending an ear to Slift?"
Inconsistent statement. No comment.
Why do you always bring me to your posts?!
Correct
Nothing new just traders that have newly sold and want to buy back lower.
Nothing new here at all.
Probably missing something here but it has been well flagged by Rahul that discussions are ongoing with bondholders to align/reschedule maturities with expected cashflows in accordance with new strategy. I'm at a loss to know whats new in the circular' The fact that they are not refinancing may or may not be a mistake but it hasn't been pulled out of the hat today.
@OhhAhhCantona: If it is a new bond or convert with a voluntary exchange/switch from the 2021 convert or the 2022 & 25 bonds, great. But the circular is specific about amending the maturity date of the EXISTING debt. TLW will need 90% of the bond holders to change the maturity, a high bar which is why you generally only see it discussed when the alternative is bankruptcy. This is why I was surprised as TLW is nowhere that point. The Cine point is interesting as there is a reference to shareholder approval being required.
So Roxy your selling up first thing in the morning but would like to let us all in on it first. Why?
@antharry: we got the confirmation in the circular today: 'management has therefore commenced discussions with its creditors' to amend terms including the maturity date. That is highly unusual. It is a road that leads to a distressed debt amendment and a selective default rating, neither of which are share price positive. Best interpretation is this is a plan B, and plan A is TLW refinancing the 2022s after the results next week, though telling the market you countenance maturity extensions on your debt does not set a great backdrop to TLWs efforts to raise new debt.
Cantona when the board mentions stakeholders instead of shareholders is because the board doesn't have the interest of shareholders at heart. There is no such thing as win-win there is always a side who wins more, there is the perception of armony win-win, but there is no such thing as a win-win (like the time when we sold Uganda when oil was at an historic low). If we have an excess of 0.9 billions in liquidity wtf are we doing giving freebies away and lending an ear to Slift?
@ Roxbury PS I like your posts as they are well balanced and good to test and challenge opinions...as you are certainly experienced on distressed debt type stuff so good content!
Wording in black and white is harsh as directors have to cover their duties but I take comfort from:
- RNS last week talked about confident mutual deal for all stakeholders deal will be done
- when Rahul did the Q&A on the EG transaction he did mention that all the going concern stuff had to be put in and was at pains to say they had to say that stuff for legal reasons
- some wording in circular is to ensure people don’t get sellers’ remorse
- the c.$350m shortfall is based on reasonable worst case if you add say another $100-150 for say oil at average of $60 then that gets you to $200m shortfall and I would be asking the question why they need $500 m liquidity headroom and could they not manage with $300m in a crisis and have an expensive bridge facility lined up...
- if 2022 and 2025 bonds (and there are apparently a lot of cross holders) get greedy on pricing PJT must have a Plan B or C to take them out...worst case TLW may need to give some warrants like on Cine of say share price hits like £1.25+...good thing is over past 12 months there are a lot of debt pricing benchmarks and market for high yield is still strong
- I just hope the adviser overload is not getting too much but Rahul has been an adviser so he should be able cut out the fog as he is into the detail.
We will still see this push on and there may be a bit of noise we have to block out over next few weeks...and a lot more challenging deals have been done and the large shareholders will vent and seek changes of Board bend over easily to the lenders
GLA
Thankyou Roxbury, got it. Hence your statement 'TLW is very clearly and very deliberately flagging to the market it may need to restructure its debt'. Its down to the Directors and the accounts dont exist for audit signature/ opinion until the Directors sign first.
Why would you expect anything other than this answer? The details are financially sensitive.
Yes, got an e-mail back from IR with 'can’t comment on the refinancing process itself'.
Android101: not an audit expert but my read is if the banks waive the test, then the auditors can sign it off. As far as I have read the liquidity test is only in the RBL, not the convert or bonds. TLW Board still have to say the business is a going concern, but this should be easy with the current bus plan, oil price and an informed view on ability to refi the 2022s.
@rafflesintheuk01: The restructure is not a risk related to the transaction. It is related to how TLW solves its bigger liquidity issue, and TLW is very clearly and very deliberately flagging to the market it may need to restructure its debt. That is not something any company says lightly.
Can we avoid an audit qualification re the liquidity forecast test and the 18-month testing period from March 2021 to August 2022.
Worst case and completion the would be a $365m shortfall in April 2022. Thats based on $45bl 2021 and $47bl 2022.
It is boiler plate and taking care of fiduciary duties
Roxy,
Thanks for sharing, I am happy that the Para 2. RISKS RELATED TO THE TRANSACTION NOT PROCEEDING, they are stating the obvious , and we are all aware of these risks, if the motion is not voted through. I am still content to Hold and ride the long term tide. This is a 3-4 year portfolio stock for me.
Cheers.
@OhhAhhCantona: Am not so sure. I asked the company last week about the S&P ratings statement and to confirm there is no risk of a distressed bond exchange - so far no denial. My base case is that they can refinance in these markets and they should hit the market right after results. But there is a reason they put they wording in the circular today. Unless you are considering it why raise it? Makes no sense to trigger event a technical default on the capital structure. I honestly wonder if they are getting best advice here and being told the downside risks they are running.
@toothache, try https://www.tullowoil.com/investors/results-reports-and-presentations/
announced in its Trading Statement and Operational Update on 27 January 2021 that it had agreed with the lenders under the RBL Facility to an extension of the January 2021 redetermination date by up to one month. On 26 February 2021, Tullow announced that c.US$1.7 billion of debt capacity has been agreed between the Company and the global technical banks under the RBL Facility; this remains subject to approval by a majority of lending banks under the RBL Facility and, once approved, will be effective from 26 February 2021. The Liquidity Forecast Test assessment, which forms part of each redetermination, is currently in progress.
Tullow issued a Trading Statement and Operational Update ahead of its audited full year 2020 results, which are scheduled to be issued on 10 March 2021. In this Trading Statement and Operational Update, Tullow announced that:
• the Group’s working interest oil production in 2020 averaged 74,900 bopd in line with expectations;
• 2020 full year revenue is expected to be c.US$1.4 billion;
• capital and decommissioning expenditure for 2020 were c.US$290 million and c.US$50 million respectively;
• year-end net debt reduced to c.US$2.4 billion (2019: US$2.8 billion), as a result of US$430 million free cashflow including proceeds of US$500 million from the Ugandan Transaction; and
• pre-tax impairments and exploration write-offs expected to be broadly in line with the Group’s 2020 half- year results of US$1.4 billion.
Looking ahead to 2021, Tullow announced in the same statement that:
• the Group’s working interest oil production is forecast to average 60-66,000 bopd in 2021 following the Covid-driven drilling hiatus in 2020;
• capital expenditure is forecast to be c.US$265 million, with an additional c.US$100 million to be spent on decommissioning;
• organisational restructuring completed which is expected to deliver sustainable annual cash savings of over US$125 million;
• in Ghana, production from Jubilee and TEN for the year to date is in line with expectations. This is supported by gas export in excess of 120 mmscfd. A new oil offloading system is due to be commissioned on Jubilee in the first quarter of 2021; and
• on Jubilee, the drilling rig is being mobilised to Ghana to commence drilling in the second quarter of the year and the first new production well is forecast to be onstream in the third quarter.
Tullow also announced in its Trading Statement and Operational Update that the Group had started discussions with its creditors with regard to its debt refinancing options which are expected to conclude in the second quarter of 2021. As indicated above, in respect of the debt capacity redetermination under the RBL Facility, the Group announced on 26 February 2021 that c.US$1.7 billion of debt capacity has been agreed between the Company and the global technical banks under the RBL Facility; this remains subject to approval by a majority of lending banks under the RBL Facility and, once approved, will be effe
No it’s also mentioned in section 3 - RISKS RELATED TO THE GROUP AND, FOLLOWING COMPLETION, THE RETAINED GROUP.