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.
Tim, but how is the risk reward is any different just because it’s been spelt out to investors what the implications are of it not completing?! The risks were the same before the results so I’m not sure what’s changed to shift your opinion.
Don’t get me wrong, I’m sure they’ll be a massive sigh of relief when the Uganda cash hits the bank, but judging by all the news flow that looks like a done deal to me.
Which companies do you prefer over Tullow with a 100% potential upside?
'Once you lose the conviction, then hard to justify holding it'
imo, if you are day trading, this stock is like marked cards in a game of poker. If you are lth, nothing to worry about as sovereign interests in oil will monetise at $60+.
Aimo
Megla,
Just because someone has sold out doesn't mean they can't buy back in. I agree with you TLW has great assets which was the main reason for buying in originally. But the risk reward is not favorable. TLW explicitly saying if UG doesn't complete, TLW will reach zero liquidity by mid '21 is them clearly stating the risks and a bridge too far for some investors. Once you lose the conviction, then hard to justify holding it. It all comes down to whether you are a short term or a long term focused, as in that article. Short term there will be spikes of course. But you would want a co. for investment which has the least downside and max upside. There is a lot of plays which have possible max downsides and max upsides. Don't want to worry about a 50% drop or 50% jump binary bets, hence people change strategies.
Slift,
I agree with you PMO is a better play once RI is cleared and the overhang is reduced. But obviosuly the current holders will hold a miniscule of the wider percentage of the co.
None of this is advice. Please do not rely on accuracy of facts or numbers or views expressed in these posts when making an investment decision. Please do your own research. All IMO
Hi Tim,
'The interims have been unnerving to say the least at TLW. '
Perhaps the BoD can take a leaf out of the new BBC Director General's book 'doing more for less programme'.
'This is about establishing what we do most of best and finding fewer ways of doing more of it less,” says a character in the BBC’s satire of its own corporate structure, to general befuddlement from those in the room.
Enter stage left, Rahul and CMD. Things will become clearer shortly. Do not adjust your set!
Good thread.
Tim - which other names would you say have at least a 100% upside? Just so we can see what you’re comparing against?
I do think both you and Tony will have sold at the very bottom in the cycle. Obviously that’s a matter of opinion of course and time will prove who is right or wrong.
Tullow’s assets are world class, long life, low cost and with lots of upside as indicated by Rahul when talking about recovery factors. The exploration portfolio is also world class, I think most people will be more surprised if the company doesn’t hit a substantial amount of oil Guyana at some point.
Yes the capital structure and balance sheet are a concern, but they’ve been a concern for some time. Nothing in the results was surprising so I don’t understand why they were a trigger to sell.
If Tullow have a good capital markets day that includes resolutions to the capital structure then I don’t think we’ll have long to wait until the share price corrects somewhat.
If this does as well as GGP Stephen we will all be very happy, investors here just need patience and all will come good imho..
Tony , Clueless
Fallen by the wayside.
Slift
Talking proper knowledge research.
Beetham
A fundamental belief in the company.
Other holders.
Good luck. This is the most exciting investment I’ve ever been involved/ Invested in. Stephen
cluelesstim,
You keep comparing Tullow to PMO. I don't believe that Tullow will be in a similar situation as PMO. In fact, I'm not invested in PMO but I have high hopes for PMO following the rights issue. The future for PMO is certain and very promising.
I do agree that risks are heightened, but the steps Tullow are making is definitely in favour of the lenders, shareholders and the future of the company.
"There is too much uncertainty surrounding some of these companies and now is the time to focus on quality assets and balance sheets, Berenberg said"
I think Tullow has quality assets. $9/barrel production costs and producing over 50k+ barrels from these assets is certainly quality to me.
As for balance sheet, this can be easily fixed as there are several ways to increase value of assets. Some of these include:
- Increasing reserves
- Increasing production
- Increasing longevity of assets
- Increasing resources by factoring in higher recovery factors at higher costs
- Exploration successes for resources
- External factors to assets/company - e.g. oil price
- etc.
Selling and raising cash isn't the only way to increase balance sheet, and I'm sure Tullow and the new CEO know this.
Just IMO.
Slift.
Tony,
Forgot to add; Thank you for your posts, been very informative. I would suggest to keep an eye on TLW especially if uncertainties are cleared. Good luck Tony.
All posts I've shared here are just my opinion. Please do not rely on accuracy of facts or numbers or views expressed in these posts when making an investment decision. Please do your own research. All IMO
Tony,
The interims have been unnerving to say the least at TLW. My reasonings same as yours. But I would disagree with you regarding outlook for Covd or Oil price. Going forward and in '21 oil price would take off there is no doubt about it but leveraged current share plays like TLW and PMO would not be the ones to recover as they did in 2016. Now the leveraged plays are very close to debt maturities but also the creditors are fed up with E&Ps and they are adamant on the equity guys taking a big hit to derisk these companies. PMO for example; current shareholders will have to take the hit so the company can be derisked but that will be a big dilution for current holders. With TLW sadly same that the '21 debt refinancing, liquidity test is too close to be fixed just by Ug proceeds alone and without timely Ug proceeds its too much risk of a binary event.
There are safer although less leveraged oil producers but they at least have 150%-200% upside if oil price goes up to $60+ in '21 with less balance sheet worries. TLW obviously has 200%+ upside but it also has balance sheet to worry about with near term proceeds/refinancing in a make or break quarter as news media shared recently.
As in this article Berenberg puts it well;
"Investors must choose whether to back quality names for the long term or take a shorter-term bet on highly geared companies. There is too much uncertainty surrounding some of these companies and now is the time to focus on quality assets and balance sheets, Berenberg said.
"Now more than ever, stock selection is key, and positioning in those names that make it through will generate powerful outperformance," Berenberg's James Carmichael and colleagues wrote in a note."
https://www.sharecast.com/news/broker-recommendations/buy-energean-and-gulf-keystone-for-upswing-berenberg-says--7452630.html
Tony,
Thanks for your contribution! Was worth reading your comments.
I do understand your points. Tullow has definitely become a lot riskier since the Interim Results. But i'm sure you will be back in oil when market conditions improve.
In the meantime, you weren't wrong with your other investments including Pensana! So good luck to you on those.
Yes I echo that Entirely. All the best Tony.
Some very good points Tony, but they effect all Oiler’s.
Depending on ones time scales we should be able to well here.
Covid will be beaten.
Demand will be restored.
Production will be lower due to lack of worldwide investment.
Shale is in the main no longer investable by banks.
OPEC + have learned there lessons...
For these reasons on a decent timescale I’m very very confident of Tullow and my buy in price is 31p....
I would like to thank you for you input on this shareboard Tony. Very informative and well researched posts which I enjoyed reading.
Id like to wish you luck on your following ventures. Maybe Tullow will tempt you back on another day.
The stock may recover and do great and I wish you all the best from the bottom of my heart. I have slept little this week and reconsidered my entire strategy what to do here. It comes to the connected set of issues that are not in control of the company. They can do nothing if a bad second wave of Covid strangles economies. They can do nothing if Iran and other OPEC members fight over market share. They have little options in the event of a banking crisis. The vulnerability of Tullow, Kosmos, Hurricane, PMO and others that carry debts is absolutely huge. I certainly feel Tullow have a good CEO and Les is quietly doing small miracles alongside him. Africa is a challenging environment and world opinion on climate change is added into the mix. Some of the posters on here are very generous and sharing and I hope you value them and that scribers think of the reading audience and what they contribute adds value.
The last stock I de-risked from eventually recovered after a 75% collapse to a 300% gain. The same can happen here as proven by a good start today if events give it a good chance.
All the best Tony and stay well