Member Info for Flavius

Anybody still believing that spikes up in the oil price due to geopolitical reasons can benefit this disgraceful share?

For sure there was a gap to fill, and oil did it today. Tullow should retest the 30.5 level in order to close the gap...

Apparently oil price needs to get as high as 150$ in order for TLW to go back to 50-60p, where it was when the oil price was...the same as today, just one year ago. That's the way it goes with this unfortunate share.

Total is not the only major oil company in the world. And in any case, no one would proceed with a take over in the O&G sector those days. Today the sector is much more remunerative and promising due to the unbalance between offer and demand which looks structural rather than cyclical. Hence takeovers opportunities will arguably increase.

Clearly a takeover of TLW by a major or a National Oil Company would address all the issues currenty on the table. It would most probably debottleneck the approval process in Kenya as the negotiating (and spending) power of an NOC is orders of magnitude higher than TLW's. As such, with an already-secured deal with Kenya government, the value of TLW would easily exceed 100p for a takeover offer to be accepted by a majority of shareholders. Because Kenyan assets would then worth billions, rather than zero as it is today. A potential takeover is the main reason why I'm still here holding tight my TLW shares.

when op was skyrocketing towards 100 usd, this stinking pile of fuming rubbish was stuck at 36p, well below the 40p reached few weeks before. in the meantime all the oil sector was growing some more 10% in terms of sp. now the op party is over (for the moment), we're sinking back to the 25p, falling like a stone, with a capitalization which is far less than ridiculous. waiting for some more virtue signalling by the bod (possibly some more share purchase at 10 or 15p level?) i can just blame myself for not selling when this share was clearly capped at 36p for some reason i'm not even interested in discovering or understanding. shame on me, back to square one with all past gains gone and the usual daily ****eshow of capitalization destruction i've been witnessing for the last 4 years.

The real issue about Kenya is... Who pays? Who is going to put the money on the table for executing this project? The answer is simple: no one. At least, as long as the interest rates are so high. A major oil company would just use part of its profits to finance a project like this, or it would issue some more debt. Sometimes (seldom) oil majors can decide to go for project financing typically by a consortium of lenders (read banks). None of these possibility is viable for Tullow. Profits of course are not enough, as the priority is taking the debt down. Issuing debt? Forget about it. Project financing? At these interest rates? Only a fool would ask for bilion dollars at interest rates of 10+% that would be proposed in the current rates scenario. The only solution is...kicking the can, together with the government, in agreement with the government. Play the card of authorization delays, bureaucracy, local communities, green concerns and all the rest of it. When the interest rates come back to the normal, and when the debt has come back to sustainable levels and profits have been cashed in properly, then the project will become magically...viable. It's all about interest rates, also in this case.

Just look at the interest rates, and you will get your answer on why the SP is so insensitive to rating upgrades, OP and all the rest of "conventional" drivers. There is a debt to refinance. If the mantra is "rates higher for longer" then it is realistic to expect that refinancing the debt will be extremely expensive for TLW. It goes without saying that IF the OP remains high, IF oil production is stable, IF new wells are drilled etc. etc. then the shorters will be destroyed and the SP will skyrocket. Plenty of "IFs" though. And with so many IFs the shorters rule. For the moment.

Just one more confirmation today that interest rates are the real driver for TLW. Like it or not, inflation data are the market movers now, much more than the oil price itself. Just behaving like a long duration bond.

And I strongly agree with your opinion, seakingalpha. it's actually pointless to look at daily fluctuations. In the long term, etiher dividends or buyback plans (better the latter) will inevitably force the shorters out of the equation and into the dust they well deserve. But for the moment, that's what we get. We'd better leave the shares where they are and come back having a look in a few months or in one year's time.

Let alone if oil price gets weaker... It's negatively correlated with interest rates, that's the reason why the SP is somewhat indifferent to oil price fluctuations these days.

Oil higher, TLW lower... something is not adding up to me?! Maybe TLW purchases oil from other parties? Is it an airline?

Very well said, Meerkat. There is an "ESG toll" to pay, for all oil-related stocks. And this toll is especially painful for companies like Tullow which cannot fight such ESG toll by paying rich dividends to shareholders. As long as the debt is so high, no dividend distrubution or share buyback plan can be introduced. Accordingly, life is very easy for shorters. It goes without saying that the price action in the long term will be consequential, if current oil prices are maintained. But in the short term, they can just do whatever they want. A -1% drop in oil price translates immediately into a -3% drop in the SP. However nonsensical, that's what it is.

PS: I keep reinstating my point about the debt: highly indebted companies are shorted whenever bad news comes in terms of high interest rates. Algos are just stupid: they select highly indebted companies and short them accordingly. No matters if it is an airline (see the price action of Air France for example, total nonsense) or an oil company like TLW. When and if the interest rates start decrease, the SP will benefit for sure.

The scenario to me is clear: shorters are betting TLW will not be able to refinance its debt (see Happy posts for example). This is a fair position, as I already stressed in previous posts on the impact of interest rates. Under a depressed oil price scenario, the current interest rates would objectively put the company in big trouble. On the other hand, this IS NOT the most realistic scenario. If oil price keeps going up or even stays at the current levels, shorters' bets would be just smashed, short squeeze would follow and share price would skyrocket. All, or nothing: this is the current scenario for TLW. Today shorters are just playing their game: looking backwords to justify their view about debt (un)sustainability. Time will tell.

Plenty of "looking forward" narrative in the reaction to these results. And yet, math is not that difficult: oil price along the second quarter was just slitghtly over 70$ , which is some 20$ less than the current price. Looking backwards to that oil price scenario might be convenient for shorters and doom sellers, but it does not reflect the reality and ... the future. 70 million profit with oil at 70+ $ means making huge profits if the oil price stays at these levels up to the year end (which is the most realistic scenario). Don't look back in anger, there's a lot of silver lining ahead for share holders. Patience, as usual, will pay.

The general scenario here is that the market thinks "the old way", i.e. they assume that if the oil price keeps going up, a recession will follow and accordingly the oil price will plummet. This is a totally wrong assumption, as the OPEC+ has already demonstrated that they are ready to cut the oil production indefinitely in order to keep the price of the barrel up. The US shale is no longer able to act as a "buffer" due to the financial discipline requirements that have imposed by banks on small shale producers. Accordingly, oil prices are here to stay high for longer, whatever the status of world economies and the odds of an incoming recessione.

And accordingly, TLW will keep making huge profits and the debt issue will become less and less relevant. Share price action will follow accordingly. In spite of the market manipulations by the shorters.

The plan of BRICS+ is clear (for whoever has eyes to see): they are at war against the US democrat administration and accordingly they will try anything to damage the electoral campaign of Biden & co. The easiest way is to further reduce oil and gas production in order to have prices skyrocketing and hit the US administration where it's more painful: the hyperinflation theme. In accordance with this scenario it wouldn't be surprising if oil prices hit 120+ $ in the next months.

Well Anton IMHO there's a big difference between implementing a "green agenda" and producing hydrocarbons. The green agenda attracts funds but produce no wealth for anyone, apart for the corporations involved in construction works. Producing hydrocarbons means achieving a consistent and fairly stable cash inflow from royalties, taxes, PSA etc.etc. The most likely scenario is that the Kenyan government is just green-washing the narrative in order to ease the pressure that would come (in any case) from NGOs in case of execution of the O&G projects.

Borders are not closed for oil & gas, there are no borders by definition for hydrocarbons (Russia should have taught something). For the rest, any government is interested in keeping oil flowing as oil export means revenues. And such revenues for an african country are of vital importance. Libya has kept exporting oil and gas for the last 12 years in spite of being a totally failed state with not even a legitimate government. It's a bad shake, but it could be a good opportunity for further accumulating.

Hope we won't regret as with the farm-out from Namibia just a few days before discovery of Venus by Total. The Amatuk well was planned to be drilled within a few months. One more exploration prospect gone... Just hope the management is confident in Kenya development and is rationalizing expenditures worldwide accordingly.