The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Last post from me, Supercooper made a fair point and you've confirmed I'm talking into an echo chamber.
You stated -'For 2022 Tullow have 75% production hedged at terrible prices, which mean only 25% is exposed to these $100+ prices.'. I was making the point that you were wrong, and we have 45% upside exposure not 25%... there is a big difference. We have 75% downside protection.
No idea why ENQ has risen, personally I don't care either. Nothing excites me about the company and it's strategy of buying up old assets. It's great when oil prices increases but when it falls you end up with early CoP's such as thistle and the other NS field they had.
HBR was prices to fail, and quite possibly would have if it weren't for the oil price. They've shown Lancaster isn't the whopping field it was thought to be but they still have good production numbers from the single well, had to shut the second in though. Either way, good for the shareholder for making some money! Unlike you, I want holders of other companies to do well :)
ATB
Clown?? haha mate, your the whole circus.
from the RNS 9th of May;
Tullow's hedge portfolio provides downside protection for 75% of forecast production entitlements through to May 2023 and 50% for a further 12 months to May 2024. Since completion of the comprehensive debt refinancing in May where increased hedges for May 2021 to May 2024 (75%, 75%, 50%) were a requirement, new hedges have been placed with $55/bbl floors and weighted average sold calls of c.$76/bbl for the period January 2022 to May 2024. The strong recovery in oil prices allowed the Group to secure sold calls above $95/bbl by the end of the hedging programme implementation.
Note downside protection, not upside cap.
numbers
Guidance 55 - 61
hedges 42.5
Collars 33
Puts 8.25 (downside protection only)
exposure D/S guidance= 55/33 = 0.6 production capped to upside
Exposure U/S guidance 61/33 =0.54 production capped to upside
including addition production from Ghana
exposure D/S guidance inc 5k extra from Ghana= 60/33 = 55% capped at hedges and 45% exposure to oil price
exposure U/S guidance inc 5k extra from Ghana = 65/33 = 51% capped at hedges and 49% exposure to oil price
that is where the 45% comes from, no go view the presentations on hedges, Tullow clearly state what types of hedges they have and exposure. The also clearly state 'Downside protection'
FFS, if your not going to research Tullow hedges then don't comment on them. Tullow is significantly more exposed to oil price than 25%... to the tune of around 45% in fact (I think you already know this though).
Kosmos have Tortue. 15 trillion cubic feet of gas. Last year I would have called this the worst investment in the oil and gas business. This year... probably the best investment ever undertaken. I'm not sure what peak rates will be but probably somewhere in the order of Bcf/d. to put that in perspective if the peak production is 3 Bcf then at £2 per therm the field Is bringing in $600 million a day revenue
It's 45% upside exposure. 75% D/S protection. Shorters have cherry picked the information they wanted to communicate which is, 25% unhedged production... without discussing the hedging.
15% of hedges are puts - D/S protection only, if the price drops below X then your protected and if the prices increases they you get the full benefit.
40% upside exposure with the unhedged and puts
60% collars - D/S protection and upside cap. Clearly cheaper to put in place than a put
so we're at 40% upside exposure. Then the preemption kicked in which takes us to 45% upside exposure because the production is unhedged
Why waste my time, IR are paid by Tullow to regurgitate the message that's already been delivered to us at capital markets day. Yes they may be useful to clear certain things up but certainly are not going to tell me anything that's not in the public domain already.
As for genuine holder... it's such a straw man argument. Hedge funds take large holdings in good companies to oust bad management all the time. Being a shareholder and having frustrations that the share price has stagnated and the company doesn't even pay dividends to reward a holder is a genuine frustration IMO. I'm here because Tullow has cracking assets, I'm frustrated because the potential isn't being realised or even spoken about by the board
last negative post from me today... hoping this can be more of an informative discussion point.
What are thought on Kenya, BigRisky made a good point on Kenya (also a concern from me), Rhaul has signalled that Kenya development relies heavily on finding a strategic partner. My concern is that if they don't, they relinquish the blocks. He's shown he want's to allocate all capital to Ghana and exploration/appraisal isn't high on the list. IMO he's shown his hand that without a partner he's either relinquishing or selling it off at firesafe prices. Anyone have a different view that can alleviate my concerns?
exactly my concern. Rather than prioritising producer wells and putting contingency plans in place to bring in a second rig...the board has been more concerned with pinching pennies and saving $5M a year by pulling us out of a Namibia in a where 3 billion barrels was found.
All the high impact opportunities have been stripped away here and even the remaining ones aren't prioritised. We could have drilled 3 of the high impact producers (30,000 mSTB extra) by now that were presented to us last year. Instead we're drilling WI and gas injectors. Unfortunately the plans should be flexible to capitalise on the current price environment but the board remain rigid and extremely uncreative in the 2022 plan.
Thank god Repsol want to drill Kanuku otherwise it would be another boring year from Tullow
I agree on on the points you've made. It's gotten to the point now where I won't even increase my holding even in the low 50's because regardless of what's happened or what's to come, it's just being held down consistently. Every rise is sold into and the share price stagnates.
We rise to 60p, it drops down to 48p for no reason, then it rises back to low 50's to repeat.
I have to admit though, Rhaul is starting to bug me somewhat, he's starting to come across as just an accountant with no vision... this is just the latest article
https://www.upstreamonline.com/exploration/no-regrets-tullow-boss-explains-reasons-behind-orange-basin-exit-in-namibia/2-1-1190441
https://petroleum.gov.gy/well-activities
Decent little interactive map of Guyana. I didn't realise so many wells had already been drilled on the acreage?
Jaguar-1 discovery, oil well but unprepared for the high pressure encountered
Abary-1 drilled in 1975 by Shell, oil shows of 37 deg API crude in the upper Eocene, didn't drill the Cretaceous due to poor seismic imaging... We now know the prize is in the cretaceous
Good find, this will keep me busy until the drill