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Saudi to cut an extra 1 million for June!!!

For a company to do one positive RNS in this climate is rare but to manage three deserves better than this!

It seem like the market is impressed and underwhelmed with the Uganda RNS?

Only Tullow can bring 3 solid RNS's out and still not look stable!!!

What isn't getting mentioned is the cost to TLW in partnering up and bringing this to upstream level over the next 2-3 years, it would have been huge!
Now they can walk away with a large sum and access to revenue from the oil when produced!

They are getting the cash up front and not in dribs and drabs unlike the old deal and to get free money from a world-class well when it goes upstream is a oilers dream.

The breakdown from the original Uganda sale makes the new $575mil + sales tie-in look like are a great bit of business, especially in the middle of this crisis - see below.

Tullow’s initial attempt to farm down 21.57% of its stake in the Lake Albert project to Total E&P and the China National Offshore Oil Corporation Cnooc collapsed last August following disagreements over taxes with the Uganda government.

The initial deal was valued at $900m. Tullow was to be paid $200m in cash consisting of $100m on completion of the transaction, $50m when Total and other partners reached a final investment decision on the fields, and another $50m when the first oil is pumped.
The remaining $700 million was deferred consideration which Tullow said it would use to “fund the company’s share of the costs of the upstream development project and the associated export pipeline project.”

Very disappointing price reaction considering oil rising as well.

It seems weird that the whole world is shut down but the oil industry is allowed to keep pumping oil that's not needed.
They need to get together and make cuts that suit the oil demand - If they only pump what the world needs then prices stay at a reasonable level.
It seems very simple to me!!!

Pending!!!

Be careful with the mending assets sales RNS - it's what is stopping me doing the same!

That all depends on asset sales!

The Hedged oil is an insurance policy so the hedged price gets paid out no matter how much TLW produces.
If TLW hedged say 50000 barrels at $57 they will get 50000 x $30 a barrel on todays prices even if they don't output it!

If TLW can get a semi-decent asset sale done it will change everything for the company in a climate like this.
Financial security will allow them to decide on the future output levels and this is when the hedged would really come into its own, as they would receive the 60% hedge at the difference in the oil price even if they didn't even output a single barrel of oil.

To the state-owned oil producers yes they need to pump oil but the privately-owned producer's, oil in the ground is an asset to be sold at a profitable price.

Ryan Lance CEO of Concophillips has just been on Bloomberg talking about this very subject. He said his company has just announced that they are cutting right back on output because they refuse to sell at these prices. He thinks more companies will follow suit. It will be difficult to work out what's being cut as it will increase on a daily basis but by the end of all this I think we will all be suprised by how much has been taken away?

The output drops will be happening on a daily basis now so we won't really know what the total drop is?

What will happen is if the world can get back to some sort of norm by early to mid-summer we will see a shortfall in oil supply by the end of the year start of 2021.

It's a catch 22 for countries like Nigeria, Venezuela, pump large and hardly make any money or cut and make more per barrel with the increase of oil?
Where I think we will see the biggest drops in output are small to medium companies around the world. If you are a company that outputs say 100,000 a day and for every barrel you output you add $25 of debt onto your company books. Simple basic business common sense tells you that won't be allowed to happen for a sustained period of time!

What everyone is missing when you watch Bloomberg or read the press is that there will be a much bigger cut on oil output than 10-15 mil...
If you think about it analytically if oil stays or goes lower Opec+ will cut even more and the most important fact is the rest of the world's oil producers have a straight forward option to keep pumping at these low prices and go out of business at some point or cut well back and save their reserves and save their businesses.
The analysts that keep spouting about oil hitting single figures are the same ones that make the money when it goes down and when it goes back up!!!

I think they will have to update the Asset sales and the CEO in the next couple of weeks?
These two RNS's are stopping me averaging down - These will change the way the market accesses the way they see TLW.
I don't want to be caught out when they happen and could happen anytime now!

On my calculations with the oil price and the hedge price right now, TLW is averaging $46 a barrel.
I could be wrong but that seems ok for the times we are in?

http://venturesafrica.com/east-africa-oil-pipeline-project-challenged-by-civil-society-group/