Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video 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.
Well.. reducing debt means less finance costs.
So it would be more favourable for the long term viability of the company. But ofcourse there has to be a balance. Best option is to both refinance and make use of sales proceeds for debt as well as CAPEX, IMO.
@maxplus.
As a last option. Tullow will look at raising cash via investors (wealth funds etc.) and refinancing debt first before rights issue.
I wouldn't rule it out.
Slift - exactly, which was the point to me question. Debt reduction & a level of growth for the long term viability & ultimately success. Ceo seems hungry to succeed to me.
"Despite the very tough conditions in the first half of this year, we have successfully delivered reliable production and major, sustainable reductions to our cost base. We are also close to completing the important sale of our interests in Uganda. The quality of Tullow's assets remains robust. Since my arrival as CEO, we have been developing new plans for our business, with the support of our Joint Venture Partners and expert advisors. These plans will deliver enhanced value from our assets to benefit all our stakeholders including our host countries and investors. We will host a Capital Markets Day towards the end of 2020 at which we will update the market on these plans to deliver on Tullow's true potential."
“ Uganda
Following the announcement on 23 April 2020 that Tullow had agreed the sale of its assets in Uganda to Total for $500 million in cash on completion, $75 million in cash following FID, plus post first oil contingent payments, the transaction is progressing as planned with completion expected before the year-end.”
So transaction (almost) complete ahead of schedule... will this bring the below forward ?? Very early Q1 2021 ?
“ South America
In Suriname, the Goliathberg-Voltzberg North well in Block 47 is now planned to be drilled in the first quarter of 2021, testing dual targets in the Cretaceous turbidite play in approximately 1,900 metres of water. The well will be drilled by the Stena Forth drillship.”
Timescale set in relation to completion sale of Ugandan asset ?
“ Data reprocessing and evaluation continues in Guyana to support future drilling activity. In Peru, Tullow has been awarded blocks Z67 and Z68 in the Trujillo basin, targeting a completely new petroleum system and new plays.”
“ In Namibia, Tullow is awaiting the outcome of the Venus-1 well which is expected to be drilled by Total in the fourth quarter of 2020 on a block to the south of Tullow's PEL-90 acreage before deciding next steps.”
Lots to muse over & all reasons why there’s no reason given the debt is manageable this could hit 40p sooner than we think.
Time will tell.
So rather than just “Reducing debt of course” servicing debt & not drawing down MORE debt to bring forward or enhance the NPV and future growth of tullow portfolio / improve income / cash flow or further asset sale of the company could be the tactic being taken.
Seems bloody likely imo!
Reducing debt alone isn’t going to “ build Tullow into a competitive and successful business once again.”
Especially when growing involves capital expenditure.
Wtfdik.
The CEO is very good. I'd suggest you to listen to the half year results webcast if you haven't already.
Everyone here seems to be focussed on portfolio management to raise $1b. But with the way things are going and if Tullow can really unlock value, then this company will really become a low cost and be very competitive even in todays low price market.
For example, Tullow's Kenya assets which is currently undergoing review is already very competitive. I believe the breakeven for developing this project was c. $35/barrel (including the pipeline tarrif and OPEX of c. $10/barrel).
So even in today's market with Brent at c. $42, Tullow will be able to profit from this project.
Tullow is seeking to reduce the breakeven for this project even more with the help of the CEO's expertise. Even a $5-10/barrel reduction would be huge to make this asset attractive to the point where Tullow may withdraw the sell sign.
What's more any further CAPEX recovery Tullow gets approved by the Kenyan government for this project would make this project even more viable.
https://www.petroleum-economist.com/articles/upstream/exploration-production/2020/tullow-seeks-state-agreement-on-turkana-costs
Uganda = resolved.
Resolving Kenya will certainly add more value to this company. At least the Kenyan government is currently somewhat a little supportive of Tullow following confirmation that tax incentives will continue to apply to this project. Also, with the extension provided, the Government is also supportive of a lower breakeven (or that's how I perceive it).
ALL IMO. GLA.
Slift
Slift your comment
“Tullow can really unlock value, then this company will really become a low cost and be very competitive even in todays low price market.”
And this seems to me the tact the CEO is taking hence why the 30/40p near term predictions hardly seem pie in the sky numbers.
Raise organic (all be it from sales) funds, maintain/manage debt, restructure, expand & cut costs.
The man with the plan seems to be well on the case imo.
LOL Camkite polishing the proverbial.
"if Tullow can really unlock value,"
becomes
"Tullow can really unlock value,"
remind me the breakeven for Ghana once the hedges runs out?
#Prefabsprout
Dont worry about Tullow.... We are doing just fine!
You might want to keep an eye on your Pmo investment.....