The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
No prizes for guessing who you need to find in this one.....
https://x.com/africaoilweek/status/1711726594786533514?s=20
Can't be 100% sure, however I think that is Rahul in photo 3 (on the left, back to the camera in the gray suit)
https://x.com/africaoilweek/status/1711639273764430217?s=20
I'm sure the US don't want a war or proxy war with Iran when the SPR is at it's lowest level in decades. I think this will force their hand to start refilling it ..... no matter what the price of oil. All in my uninformed simplistic opinion of course.
Tullow Oil ... proud silver sponsor. Nice to see Tullow now has some spare cash for this kind of self promotion. Let's hope Rahul can do some wheeling and dealing there.
https://twitter.com/TullowGhanaLtd/status/1710345597239119949
Https://www.linkedin.com/in/stuartcooper1/?originalSubdomain=uk
Director - Strategy, Commercial & Business Development Director - Strategy, Commercial & Business Development
Tullow Oil · Full-time
Jun 2023 - Present
About
Over the past 30 years I have developed a leading expertise in business development, commercial negotiations, portfolio optimisation, mergers and acquisitions, strategy and change management in the energy sector.
https://www.linkedin.com/feed/update/urn:li:activity:7115596169648463872/
Recruited in June for a reason ... going to to be interesting I think
Thanks Adieuk32 ... also looks like IR have up'd their game. Now seems to be posting regular snippets of info on social media.
https://www.linkedin.com/posts/tullow-oil_africaoilweek-aow2023-aow23-activity-7115636040496750593-Yb2k
Rahul said it in plain English .... 65k bopd and 7 boepd gas being produced now. Problem is because we've had 3 years of waiting no one is taking any notice or has any more belief. And remember there are 2 more wells due online this year which should take Jubilee up from 100k to 120k bopd, plus all that has nothing to do with Kenya.
It will translate into results on paper and at that point it can't be ignored anymore. Surely can't be more than 3 to 6 more months of this nonsense. Oil price will obviously play it's part and in the mean time the MM's just harvest money off the PI's by taking up and down.
Rahul said we were at an inflection point and I think we certainly are in terms of the share price. It has taken a bit of a battering down from 39p to 30p after the HY results. However, we're still toughly 50% up on the 52 Week Low of 21.84p. Will we go back to the 20's ... possibly. So the gamble is do you top up at 30p or try get in later in the hope of getting in sub 30p. I however think we've dropped on sentiment due to those gambling on Kenya running out of patience and exiting. The MM's like to wear you down and take your money.
So what happens now ..... we know despite what is reflected in the share price Tullow is in a good position and currently producing 65k bopd and 7k bopde of gas sales. We also know that there is a much better hedging strategy in place to benefit from the upside of the oil price and that oil is still well over $80. This will eventually be seen in black and white in the 2023 HY2 results and 2024 forecasts and will get to the point where it can no longer be ignored. Also, it is still a remote possibility that we may get a positive outcome on Kenya at some point and we'll almost certain at a minimum get another interim Ghana gas sales agreement. Plus we have 2 more wells due online in Ghana this year.
On the flip side we have the Ghana tax dispute hanging over us, however looks like we won't see an outcome on that for at least 18 months. at which point we'd probably have the $300m odd to pay it if it went against us. Then there is the debt, which we've been assured is no longer an issue. What reason do we have to believe different, besides interest rates are higher. We have less debt to refinance than in 2020 and then it wasn't an issue, even though people thought oil was going to be worthless. So perhaps we may end up with an eye watering interest rate, however nothing we couldn't live with. If you're going to lend money to someone you want to squeeze them, but not to the point where you squeeze the life completely out of them.
So that's my take on it for what it's worth. Just me thinking out loud really and what happens remains to be seen, however it's a still a hold from me.
I agree that Rahul isn't selling it very well. Maybe he is concerned about over estimating anything as everything drags the price down, so imagine if he said we're going to produce 100 barrels of oil next month and we only produced 99. We have a trading/operational update on 15th November and he needs to give some good news ... better yet at Africa Oil next week . Plus we need the Ghana Petroleum Commission to pull their finger out and update the August and September numbers so we can see in black and white what the new numbers are.
https://www.petrocom.gov.gh/production-figures/
Well it is nonsense and I based that on the fact that the guidance for the year is touching the 60's and not low 50's. Yes Q1 was 53k and yet the guidance is still 58 to 60k for the year. Why, because we're now producing 65k and that is the simple fact and what really matters. That's quite some step change and Rahul has done a cracking job. Yet so many on here are negative and critical of Rahul. The guidance for 2024 will reflect what is currently being produced and not what was produced in H1 2023. As will the cash that is now coming in daily. The ship has been turned around, however patience has been lost by some who've held for years. Not the time to be giving up hope. Just my opinion of course and each to their own.
For me there are two very interesting ones below:
1)
Opportunities and Challenges in African M&A
Stuart Cooper, Director of Strategy, Commercial and Business Development, Tullow Oil
If you look at his linked in profile you will see that he is ex Harbour Energy and only started at Tullow in June 2023. He was hired for a reason.
https://uk.linkedin.com/in/stuartcooper1
2)
FIRESIDE CHAT: Key Industry Trends and Outlook in Finance and Energy
Speakers:
- Phuthuma Nhleko, Chairman, Tullow
- Ade Adeola, Managing Director: Energy & Natural Resources, Standard Chartered Bank
Standard Chartered Bank were going to fund the Uganda pipeline before they were forced to withdraw due to green activist investors putting pressure on them and the Chinese having to step in to fund it.
Sentiment is everything and sentiment has changed since pre HY results when we were 39p. People have exited as they got tired of waiting for Kenya and the Ghana gas deal. You can see it on this board ... we have StanleyPro saying we should just give up an oil field worth 10's of billions of dollars, so we don't have to spend a few million on it. Makes no sense at all. As for the" low 50s (kbopd) is simply not good enough!" statement, that is just nonsense. The guidance was narrowed to 58 to 60k and is still within the original range quoted for 2023. Then you need to go back and watch the HY presentation again to remind yourself of the bit where Rahul says Tullow are currently producing 65kbopd at the moment. That is without the 7kbopde for the gas being supplied or the 2 remaining wells planned to come online in Q4 this year.
Tullow are making the jam, it's just not been put in the jar and had the label stuck on it yet. That is coming very soon. I think a lot of people who exited here in the 30's will have some serious regrets later this year/early next year. Not to mention the big shorts.
I disagree. If no one was willing to invest Rahul would of pulled the plug and walked away, as to paraphrase him "Every dollar counts and every barrel matters". Instead he allocated additional funding towards Kenya when the partners walked. Uganda was funded, as will Kenya be funded. If there's money to be mad, there'll always be someone to invest. Tullow has nearly 80% and the Kenya government just over 20%, with the markets having given Kenya zero value. That gives Rahul a lot of wiggle room and whatever he comes away with would be seen as a win given this was written off years ago and has taken forever.
Nice to see the random negative posters popping in to give us some much deserved encouragement. I'd just like to remind you that no one had any faith in Tullow in 2020 and the 2020 refinancing and look how that turned out. It will play out the same again this time round. And as for "As for Kenya....my oh my! This time next year, no progress or the license will be handed back (sold).". I think you'll find it's Tullow waiting on the Kenyan government and not the other way round. Clearly you've been doing your research between now and the last time you popped in. Enjoy your short position while it's in profit.
I think maybe you're confusing WTI crude which is $88 and Brent crude which is $90 (unless it has dropped $2 very quickly as I don't have the live oil price). I think we need the official production numbers out of Ghana for September before we see some positive movement up again (or another positive RNS of course).
Opportunities and Challenges in African M&A
African M&A has continued to be active and has drawn in new market entrants. However, there have also been challenges with deals taking greatly extended periods to close.
• Opportunities - What’s driving the new entrants into the market (both pull factors attracting investment and push factors from other mature regions)?
• Challenges - What are the challenges facing deals and why are they taking so long to close?
How can this process best be managed?
• Funding - With turbulent stock markets and transition pressure on investment in the hydrocarbon sector, how are deals being funded?
Moderator: Paul Morton, Partner, Herbert Smith Freehills
Speakers
- Tom Freije, Director EMEA, Evercore
- Stuart Cooper, Director of Strategy, Commercial and Business Development, Tullow Oil
- Camillo Atampugre, Director - Resources & Energy, Absa
- Xavier Venereau, Head of Producers & Finance, bp
- Adegbola Adesina, CFO, Aradel Holdings Plc