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What amazes me is that in that same article it said that the combined investment on Uganda from all the owners had been 3.5 billions and everyone is excited selling a third of that for 0.5 billions.
I hope the share price recovers but reading some people's comments here is painfully stupid.
debt holders have preference over shareholders, the sale of the Ugandan assets don't cover our standing debt your point is pointless (and dumb)
Ghana OPEX is 9$ per barrel, we are expecting to be cash flow positive this second semester.
We don't need to sell assets we should be raising more capital to refinance our debt from commercial banks (or through a debt issue from an investment bank) and keep our non-producing assets instead. We don't need to sell assets to keep up production.
First the interest rate is different from the inflation rate, inflation (money printing) is higher than 0.5% probably around 6%-7% depending on the currency. The internal rate of return doesn't depend on any central bank (maybe for the interest rate of our standing debt we are paying a premium rate anyways).
Second we only have producing assets for ten years at best, with production declining each year.
Third the market cap. is around 200 millions (not really, most shareholders won't settle for so little while others let's say 30% of shareholders will settle for for less they are pulling the share price down) while ebitda is around 1400 to 1600 millions (revenue), debt is around 3 billion (2 times ebitda x2 gearing not 3 like the CFO says) we have also uganda (temporarily until sale completion) and ethiopia so debt could be around 2 billion (x1.3 gearing), oil price has the capacity of doubling or tripleing at this prices (that could grant us a free cash flow of 1-2 billions more) so Tullow is hot but it is nowhere near 20 billions based on any discounted rate
The fear/threat of dilution alone is what is holding the share price down, brent is no longer at $15 per barrel (when wti was trading at around negative $37 per barrel), Saudi Arabia and OPEC don't have the stomach to keep fooling around, January 2021 is a very limited time frame and quite random but by 2022 oil prices will have fully recovered.
As long as management don't do anything too foolish (like diluting) we will be fine.
first natural declining production through it's live cycle
second it was and it is an estimate, they (the managers) were boasting that Tullow estimates would be between 150K to 200K oil production (with Kenya and Uganda and maybe Guyana production in place) in a near future, they got in trouble for not being rigorous enough or at least that's what they felt so now they threw in a way more conservative overcautious estimate, 70K may well be the lower end or even lower than their real expectations (Ntomme Oil Field has been drilled this year)
Tornadotony, Tullow size is good enough and it's employees can operate Guyana or Ethiopia just like they can operate Ghana, I don't see why we need to keep giving freebies to other oil majors.
There is good debt and bad and there is bad debt, consumer credit is bad bad, but dumping assets to "reduce debt" (you won't get much) is also bad.
Dump assets?
Why not give them away for free?
The less assets we sell now the better off we will be, there are few oil investments and low capex in the industry, so production is going to be hurt, lower oil supply in the future, we just need to hold until the demand side has recovered, then oil prices will go up. It's just a matter of time economical crisis don't last forever, it's better to refinance debt right now, issue more debt and keep our holdings, the market is very low now there are not many buyers an won't overpay so it is not good to sell now. Just imagine that the stock market has closed and there are not any buyers (only sellers).
It's clear to me that the company is worth more than what it is trading for. SA needs higher oil prices I don't believe they can afford to plummet the oil price again. We just need to hold and not sell our assets. Mr. Market is in panic mode so ignore it or take advantage of him.
Suriname is going to be drilled for the 4Q. If we find light oil it would be interesting to know how many mmbo will be added to our reserves. Hope that we find something to compensate for the Ugandan sale.
WHERE'S CANARYWHARFY? :')
here
what for?
We don't need to sell.
And you won't get my tacit approval by remaining silent.
Bye
I am ignoring you, in your own merits.
There are only daytraders and posters about other stocks.
People in this chat don't even have an interest in the company.
This board not worth my time. addio bye
What will you do if the stock jumps up right after you sold?
wouldn't be 4 billions, it would be 4327 / 3 = 1.5 billions, and that would increase production (60 bopd) by 80%.
1% of 200,000 barrels of oil per day is 2,000 barrels of oil per day, which is $100,000 per day and in a year 30 millions, it would take 30 years of contingent payments to make up for the difference (without taking interest payments into consideration).
So have you decided to sell your shares to someone who will vote against the Ugandan sale because is not in the 40s yet?
Thanks!
Has an history of expropiating oil companies.
Will be a great deal maker if the vote is passed and we will be dummies!
Cases, Cases, Cases! If we didn’t test so much and so successfully, we would have very few cases. If you test 40,000,000 people, you are going to have many cases that, without the testing (like other countries), would not show up every night on the Fake Evening News.....