Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Would be nice to see a rise tomorrow but in these times anything can happen
YE. I have read their guidance but I believe that our interim CEO Dotty kitchen sinked the outlook statements to clear the decks for a new CEO. New incumbent will naturally want the platform for a turnaround at rock bottom expectations. In addition we all know the market is forward looking and A plan out to 2022 would still have an impact on sentiment and forward earnings projections. Also worth noting the 70k guidance hadn’t accounted for flaring permits to control re injection. If we see $60 Brent in 2021 and a commercial hit in Guyana £1 is possible.
If tlw can produce $100m free cashflow every year ie after capex etc then using 12% discount rate, that would be worth c$0.59 (c47p) per share ie
100/.12/1410.
Can tlw generate $100m fcf pa off 70kbpd?
Tradeemup some good points however back in December the company made it quite clear that production would be 70-80k in 2020 and average 70k in the following 3 years. This means the issues they are facing are not easy fixes and there is absolutely no way of revising the production up to 90k in the next 12 months.
Tullow is weathering a major storm at present however it has strong assets and a number of catalysts that will see the SP increase.
1 - Uganda deal needs to go through preserving cash and Capex commitments in an unstable geography.
2 - the road back to 90k BOPD needs to be cleared and signposted by new CEO
3 - The exploration assets are highly prospective. Should the Goliathberg well be successful in Suriname then it will be well received. Just look at Apache share price rise and the amazing deal struck with Total for a 50% farm in.
3 - Orinduik In Guyana and the poor communication of. Major discovery prior to analysis of the oil deemed heavy and high sulphur. These were all in the tertiary and the Cretaceous prospects are huge 700 MMB targets. One strike and its game on to £1.
The balancing act between Capex against backdrop of debt will be key and some fortune of course when you a dealing with exploration. It’s definitely not implausible that TLW SP could be £1 within 12 months. EG oil returns to $55-60 range and Tullow guidance is revised to 90k BOPD and Guyana and Suriname assets deliver a commercial discovery. All to play for but not without risk
I see 45p short term if oil price up
Do you see us reaching 45p any time soon as a conservative estimate at the current bouncing oil climate?
How do you get 60p or 100p?
Slift yesterday shows net assets = -ve or zero after uganda and kenya sale.
Only thing left is cashflow servicing debt and maybe growth if can reduce cost pbl under new ceo?
Those are the conditions for a lowball bid, change staff costs etc
You may be correct, the conversation suggested 60p which was deemed as cheap, a £1 price would be more the figure. If it is in the planning i would imagine we will hear before September, but as i said before i am guessing. Watch this space tho!
I think you would find 60 p is very conservative , they would have to pay a premium for the shares.
Pound minimum imho
Think they should auction the 2021 debt if possible. Something more than market value but less than coupon will add to the sp. Its a list of small wins that will incease sp rather than one big thing imo, at this stage in the recovery.
I am not sure myself , but i did hear 60p spoken of on some twitter pages, with the asset sales that may change tho.
So what do you class as low ball ??
My money is on a takeover or a lowball bid coming in, but i must admit if it does not come soon it may not happen. We know Samuel is very interested and i believe Total would be mad not to have a go, just my thoughts , interested to know yours??