Member Info for bluemoon71

CNE shorts reduced again 0.2% yesterday. Voleon Capital are the only main shorter now and they've reduced from 2.1 to 1.5% since merger RNS. Tullow shorts unchanged.

Shorters are reducing in CNE, they dropped 0.5% on 1st June. I expect we will see further drops this week

Significant drop in Capricorn shorts on 1st June, Tullow shorts unchanged...so far

Oil, I didn't say Tlw debt will reduce by 45%. Read again.

I've already stated in previous comments Tlw shareholders are giving up 47% equity, but it's not a pure dilution. They get stronger balance sheet and 35,000 bpd of unhedged, finance free production.

You're entitled to a different take on the information in front of you,it is a discussion board after all, but when you talk nonsense in your comparison to PMO don't be surprised to be picked up on it.

Oil, post merger the issue is debt of newco nit Tlw debt,as tlw no longer exists.

1. PMO had $3B debt, post takeover HBR had $3B debt. No change.
Tlw has $2.8B debt,post merger newco has $1.5B debt. 45% reduction.

2. SP growth isnt determined by size of production but future growth. Chrysaor assets were forecast to decline from 190,000bpd to 107,000 2020-2025. PMO assets growing 44,00 to 55,000. A significant decline for HBR. TLW/Capricorn is expected to grow from 100,000 to 170,000 over same period.

3. Tlw isn't distressed post refinancing, which is why it has gone in as equal partner with Capricorn and not shafted like PMO.

GLALTH

Oil, you were obviously badly burned by the PMO takeover but your comparison is poor on so many fronts. Chrysaor had it's own debt mountain and a declining production outlook. PMO was in last chance saloon for refinancing, as Tlw was before its bond refinancing. Tlw/Capricorn have a growing production outlook and the combined leverage is <1x before any improved production forecasts. We've sacrificed 47% equity, trading a potential short term rapid increase in SP for a significantly stronger balance sheet, and financial flexibility to maximise opportunity in Kenya and elsewhere. To compare it to the 20:1 dilution with PMO is nonsense.

There's also a similar number of shares shorted in Capricorn, albeit by different companies. A reduction in shorters in either company should have positive impact in the other. One to watch in coming days/weeks

As of today, the key number is ye2022 leverage of <1x. This has positive knock on effect on 1. future ratings hence financing costs, 2. ability to pay dividends thereby widening likely interest from IIs, 3. lower downside risk hence less interest from shorters 4. More flexible capital decisions divis vs growth projects vs inorganic acquisitions.

All other numbers today are just sum of the 2 companies. Expect uoside benefits from capital markets day in due course once opportunities prioritised

Personal take from call.
Cons: Rapid re-rate of Tlw SP unlikely given dilutive effect of merger on any very positive Tlw news eg Kenya.
Pros. Downside risk very low. Strong balance sheet (1× leverage ye2022). Return of dividend should bring in more IIs. Balance sheet allows genuine 3 way choice for capital- dividend, accelerate growth projects,inorganic expansion. Should see shorters hopefully move on so less daily swings.

Overall, less exciting short term but more likely steady growth in SP

All IMHO

GLALTH

No change in strategy for Kenya approach. News in 'due course' . Still positive vibe

Leverage forecast at less than 1x by end 2022. Solid balance sheet

First benefit from call, commitment to 2nd rig 3Q this year. High payback projects being moved forward

Hopefully this will be a catalyst for our shorting friends to pack up and move on. It will provide some drag to potential upside but significantly reduces balance sheet risk. Cautious and steady. Just like Rahul. Thumbs up from me. GLALTH

I think today's Sp movement highlights that there are forces,other than the oil price, working on this. GLA LTH

Hats off to you BumBum,a gutsy move and it would appear,so far, proving the point.

Until we lose the shorters, they and the MMs can cycle this +/- 25% on tiny volumes. Shorter reduction or, RNS that changes the game, are what we must wait for imho. Patience

GLA LTH

Tlw has 60% hedged on upside(dropping to 55% post pre exemption buy in) for 2022 and 75% hedged on downside for 2022. A rosier picture than most wish to paint

GLA LTA

There is amongst retail investors, a lack of confidence, not unsurprisingly given Tullow's flirtation with an existential threat over the last 2 years. But, that confidence is building, and if Rahul can continue to under promise and over deliver, the next 12 months macro oil environment looks to support some real SP improvement

GLA LTH

Seems Pictet have completely unwound the short they took out on the 29th., just one day later. Perhaps they took flyer on Ukraine war ending after reported positive talks on Monday. Explains the SP holding up yesterday. Maybe further reduction today?

GLA LTH

My understanding is the contingent payment is an annual payment IF the annual average Brent oil price is above the quoted levels ie Brent must average above these levels for the year. Payment is then based on upstream revenues(net of tax)ie. Production times sale price and nothing to do with production costs but is only on production related to Tlw share sold(was 33%)

Check wording yourself here. https://www.tullowoil.com/media/press-releases/tullow-agrees-sale-its-entire-stake-lake-albert-development-project-uganda-total/