Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
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@Lemming99
Is there any chance you could enhance the graph and overlay a few additional variables. Be interesting to see the debt level on the chart as well and maybe things like production numbers, as these have a big impact on the share price. Thanks
@smalltrader, was late Jan.
We expect results by mid April
Hope the drill is a success. CoS 35% sounds a good one in the oil industry but recently BPC turned out to be a duster with CoS of 30%
Anyone know about the spud date? Will try to dig through the RNS.
Fantastic analysis here lads. Very informative. Thank you all, with special thanks to Lemming99.
Thank you Lemming
Toothache, you may well be correct it sounds in the ball park.
What I have tried to demonstrate in the example that to some 34% sounds low however a geologist report is never going to give a much higher percentage based on the different things they factor in.
In other words, I am saying that 34% is a very strong indicator of oil being present.
Let's hope so!!
A successful commercially viable drill result is about 30% on average, you are correct.
@Jetcrowts. From a report (in the past 10 years 2009 - 2019) I read on the % success rate of drilling is that the % figure represents all of the oil drill rigs that produce viable commercial crude. I think 34% does not represent 1 drill rig.
Happy to be corrected.
The below will illustrate my point on why 34% is a high figure for striking oil:
For exploration ventures, the recommended method to assess the chance of commercial success is to first identify the minimum field size associated with the firm's definition of the threshold of commerciality, and then to determine what proportion of such fields occur in the natural population of counterpart accumulations in the subject trend, play, or basin. This requires the geologist or engineer to construct a field size distribution.
Example
For a given extension project having a predicted mean reserve size of 1,500,000 BOE, the geologist has concluded that the probability of reservoir rock is 0.9, the structural probability is 0.8, and the probability of hydrocarbon charge is 0.9. The chief geological risk concerns whether a key fault will or will not seal, and the geologist assesses this as a 50/50 proposition. Thus, the perceived chance of geological success is 32%. However, construction of a field-size distribution for 20 analogous fault-separated fields in the trend reveals that only 3/4 of them are larger than 200,000 bbl, which is the minimum economic field size in this trend for your firm. Therefore, the chance of commercial success is 0.75 × 0.32 = 0.24. Calculated in this way it represents the chance of finding a field of 200,000 bbl or larger.
Hope that makes sense.
Good analysis Lemming.
Historically tlw has done well when oil has and this is played out with the graphs.
My only point would be that the analysis does not include the details of the RI about 5 years ago and the proper mismanagement under McDade which involved heavy spending and a number of dusters.
I feel that with lower capex tlw will be drilling only in areas where there are excellent development opportunities hence making for an exciting few years ahead....don't forget 34% is a fantastic percentage for a drill to be successful, I know that it is 1 in 3 but the geologists rarely give better than that in offshore drilling.
We are in a far better financial position than for a long time and have a CEO who knows that as debt is reducing this has a snowball effect with lower interest payments and the ability to get cheaper credit further down the road.
TLW is in safe hands.
ATB DYOR
Lemming.I found this to be most helpful and confirms some of the underpinning issues relating to this share.Whilst not putting the relative prices through a formal calculation I would estimate the r2 at around .94 up to the November announcement and the recognition of the need for a strategic review and direction.Again a purely personal viewpoint my estimate is that the share position reflects around 30% of the position it would have been had it maintained its prior correlation level.A very simplistic approach I agree and takes no account of the intervening variables.
@Lemming99: Thanks for the picture. One important point to note is your comment "if the oil price (OP) went up 10%, a company whose main product is the production of oil would naturally go up 10% too". If the cost of production per barrel is USD25 and Brent is at USD25, the company is at Break-even. If Brent doubles to USD50, this should result in a more than doubling of the SP. The company has gone from zero profit at USD25 to a significant profit at USD50.
The value, theoretically, is back to discounted cash flow of future earnings (net). In Tullow's case, if the debt maturities can be reorganised to match the need, this company will be in a very strong position. It will have options on developing either or both of Kenya and Guyana. In the Guyana case, even though the Orinduik finds were heavy oil with a high sulphur content, they are still likely to be commercial at USD60 per barrel. Add in their share of the Hammerhead field (Exxon find that extends into Orinduik) and the possibility of finding better quality oil in future drills in Guyana, and one has a very interesting future, as a LTH
Interesting...thanks
Here are a few thoughts and a graph comparing Tullow and Brent over 18 months. As always, if I've made an error please point it out here and if there's evidence, I'll update the blog post.
https://lemming99.blogspot.com/2021/03/tullow-oil-vs-brent-spot-price.html