Member Info for Flavius

"Half that much (1.3 b) in cash by the end of the year"... Really???

Shorts left for the same reason longs remain. The same reason why TP were in the 15-20p area etc etc. Ian decided to upset the applecart and let it sink. One day we will all know why. So far everyone has been caught off-guard, that's fact

Panmure Liberum has repeated a 'Sell' for Tullow Oil PLC (LSE:TLW) shares, and slashed its price target to 5.4p, warning that the group is “going backwards” at a time when a critical refinancing is fast approaching.

In a sharply bearish note, the stockbroker argues that Tullow’s flagship Jubilee field continues to disappoint, with production issues and early water breakthrough dragging output to the bottom end of guidance at 40,000 to 45,000 boepd - although the TEN field is performing well, its scale is far too small to offset Jubilee’s underperformance.

Panmure notes that limited free cash flow means net debt is rising again, to around US$1.2bn, even after US$340 million in asset sales earlier this year.

With US$1.3bn of bonds maturing by May 2026, the analysts warn that refinancing is now the overriding challenge, overshadowing all operational considerations. The finance firm also highlights that any extension of Ghana’s PSC, needed to add recoverable reserves, is not yet secured.

Analysts reckon Glencore, the London-listed commodities trader and producer, may emerge as a key power broker given it has a US$400m loan secured against the same assets as Tullow's 2026 bonds.

Ultimately, Panmure argues that a debt-for-equity restructuring is the most likely outcome, but it would be one that would leave existing shareholders “wiped out,” making it difficult to see any investment case for the equity at this stage.

Think about institutionals sitting over losses of 95+%. To them TLW has just become a write-off on a balance sheet. And yet, these guys were supposedly much better informed than our good selves about what was brewing. How did they end up in such a mess?

We can just keep speculating here. Truth is the CEO himself decided to throw the SP under the bus last Friday. He must have his good reasons for that. But the truth is we don't know anything. This led many of us into self-destruction as in our unawareness we trusted that "a plan was in place". There was no plan in place in fact. But on the other hand, should Ian have one more trick up his sleeve, the SP could bounce back into the 20s. Only he and few more institutional investors know.

Regarding KOS, their debt is obviously too high, and Ghanaian authorities too frighteningly untrustworthy to justify an increase of interest in Jubilee and Ten. KOS SP collapsed due to the risk of a D4E disrupting operatorship of Jubilee. We do not have to forget that Ghana is teaching a lesson to any potentially interested foreign investor: don't you dare make business with Ghana, or you'll get destroyed. And this obviously doesn't facilitate a TO (and a refinancing, by the way).

Xx I agree with you about FCF (barely) negative after interests payment in 2026, but on the other hand 2026 will take the whole burden of Capex investments for the 5 additional wells, while 2027 would arguably benefit of extra-production with generation of much more FCF. Clearly Ian wanted to be overly pessimistic as he apparently highlighted only negatives while disregarding reasons for optimism. He must have his own good reasons for that.

D4E is clearly on the table, this is the message that Perks passed on Friday. And this is reflected in the current SP as capitalization is less than 10% the amount of net debt and accordingly reflects a post-D4E value of about 1.3 bGBP: lower than value of the assets but not so far away from intrinsic value in a low price scenario and low production.

IMHO Perks chose to change tone and be less accommodating to Ghanaian authorities, message being: either you pay for expired cash calls or in a few months operatorship or this asset will be in total shambles with new owners interested only in liquidating the asset and no any focus on asset management, infilling, production management and all the rest of it. He put the gun on the table for both Ghanaians and bond holders. It's clearly a desperate move, but on the other hand kindness is not rewarded in relationships with countries like Ghana and with shark funds aiming at maximizing their returns at the expense of shareholders.

Before TLW there was WG and PFC. Three once prestigious players reduced to dust. All the three acting in the oil and gas business.

As an Italian loving your country with all my heart, I honestly wonder what is happening in the UK. What is the ruling class in the UK up to? Since 2020 the only big themes on the table were wearing masks, then vaccinate, then decarbonisation, now militarism. And in the meantime, UK was rotting from within.

I see the UK sink from afar with GILTS cheaper than the once untouchable Italian treasuries, and it's not a nice show, even more as I have always seen the UK as a model to imitate, the perfect place to work. I also guess TLW is not an isolated casualty but just one of the many once glorious British assets which have been turned to dust. Deliberately.

Good luck.

GOR increase is related to gas lift as explained in previous updates.

On the other hand while in previous updates there was some space for optimism "we are doing this and that", this time it was just "production is declining and we have no idea what to do". Very very very unusual communication strategy for a company looking for imminent refinancing. Wonder which purpose does this pessimism serve. For sure it is not helping refinancing cause. Which game is Ian playing here? Why his message is so pessimistic, far beyond any expectation after KOS update? Is he a saver or liquidator serving an easy prey to a black knight? Not really clear to me honestly. Puzzling.

Agree xx, but those strategic mistakes were followed by further mistakes which were much easier to avoid. The last 4 years have been really nightmarish: naive, crafty and event-driven management with no any strategy in mind and zero risk management. Refinancing risk has always been there, and has always remained unmanaged.

What I just blame myself for, is that I overestimated the quality of TLW BoD. I thought they just couldn't be so reckless as not to have a plan in place. "They will find a way" has always been my underlying assumption so far. Well not, they haven't found anything, and they have just screwed it all up. As a mgr in the oil and gas industry it is honestly shocking for me to see a company managed like this. This is even more shocking than my losses in themselves. I'm horrified by the s*iteshow that these guys have managed to put in place in spite of their huge salaries and presumed competencies.

For the rest, I honestly don't blame anyone here on this chat. We're all grown-up people here taking risks and thinking with our own heads. There's no point in laying the blame on others for the disasters that we've made to our portfolios by relying so much on a gang of incompetent wannabe managers. It's just our fault. Facts speak louder than opinions, and facts say that xx, JMAX and others posting here more or less politely or competently were right. While many others (starting with myself) were wrong. That's life, no point in arguing.

For the rest, gamble after gamble, now the real bet is on survival. Will this stuff be able to survive in spite of the uncountable proofs of incompetence and mismanagement its BoD has provided so far? Is it worth to remain invested hoping in a rebound. Up to you guys. Good Luck All.

Buster, times of international law are not compatible with the expiry date of the 2026 note. What makes me really wonder is how a just barely decent top management of an oil company can put themselves and the shareholder in such a situation. They've known for...years that the 2026 note needed to be refinanced and they did just nothing to make this happen. When the SP was in the 50-60 even a recapitalization would have been a relatively easy exercise: survival of the company would have been ensured, and also additional capital to invest in exploration, acquisitions etc. Well they did just nothing, plain nothing. And here we are, after selling all the residual jewelry of the family, with impending expiry of the 2026 note and countless entities which just aim at increasing their potential profit in case of company bankruptcy (starting with Ghanaian Gov.)

Speechless.

What is the interest for Ghanaian Gov. in fulfilling financial obligations where they can make profits on TLW bankruptcy? They're actually doing whatever they can to make it happen. Should that be the case, they probably hope to buy the assets for peanuts while dancing on the corpse of residual shareholders.

At this point in time this is a chess game between TLW, creditors and Ghana. It goes without saying that liquidation of all those assets was a prerequisite for refinancing negotiations. But it's not hard to believe that creditors are asking for too much (there was plenty of time to find a sensible agreement, but creditors arguably found it more remunerative to kick the can in order to get better terms) , and possibly today the CEO decided to send a message like "do not pull the rope too much, ore we're all going belly up, together".

See what happens. Nobody has a crystal ball here. And everyone is alone here, with his losses and wounds to lick, like it or not.

It was a gamble and apparently the gamble has failed. SP is a very approximate not to say random reflection of the situation: 80M capitalization means this CPY will not be able to avoid default on debt, at least this is the assumption by the market. Maybe Ian Perks is just playing a dramatic card with the bondholders "either we reach an agreement, or you'll get nothing", as it is otherwise difficult to explain the doom and gloom tone of this last update. Very little has been told to help the SP: no optimism on production (falling in spite of the ongoing infilling campaign???), refinancing (negotiating with some bondholders? Some? And what about the others?) and even relationhips with Ghana government (100M outstanding due payments, good luck).

All in all, SP is nearly zero, so whatever one does now, could be the wrong move. Even going back to 10p would be almost a 100% increase from these levels. Losing a couple more cents, a 40% loss. It's more than a gamble now, either way (i.e. selling or adding up further). Truth is, nobody really knows what's happening tomorrow here.

I honestly wonder what "big holders" and institutionals are doing right now, sitting on those enormous losses. But at the end of the day, who cares... Our losses are for sure not less painful. GLA.

Market down, bots sell. Nothing to see here actually. We all know where the real issues are. 125M capitalization means this company is totally worthless. In theory. In practice, though, it is not, and it is worth multiples of this SP.

On the other hand market is not totally crazy and deserves some credit: we're talking about a company with an expiring note worth some 10 times its current capitalization and with a top management which is totally silent about it... No institutional investor can touch such a company, even just watch it, it's jus... radioactive. And it will be like this as long as the CEO stays silent about refinancing while the clock is ticking. As long as it keeps ticking.

For a small fish like me, things are different. I'm tempted to buy some more, as a repricing would be massive after a refinancing is achieved. Trouble is, what will be the terms of such refinancing? Honestly the perspective of a recapitalisation or a debt-for-equity is what has prevented me for further accumulating. But on the other hand, considering the SP is virtually zero, recapitalisation or swap-for-equity is just nonsense. And here I am, waiting like Godot, like many other small fish like me.

Well said, XX. The point here is that nobody actually knows when OP are going up to decent levels. But in the meantime, no one can afford the luxury of staying idle waiting for a better future, and even more if you are highly indebted. This explains why, though in an low OP environment, most oil companies (including supermajors) are boosting their production as much as they can: just to compensate the lower oil price. Everybody is doing this, including NOC (e.g. Russia is pumping at record levels despite a largely obsolete or .. damaged infrastructure), shale companies, and even supermajors are postponing maintenance and pulling the neck of their wells just to mitigate the low OP environment (I know this very well for ...professional reasons).

All in all, everybody is trying to produce as much as they can. Including OPEC which has now "stalled" the increases not as a strategic choice, but simply because they've run out of their spare capacity. Media collectively is pulling a "oil glut" narrative that has only political motivation, but everything today cries a future spike in oil prices for lack of supply as no maintenance, zero exploration, reduction of spare capacity are all creating the ideal conditions for an explosion of oil prices in the future. How far in the future? Nobody knows, but it's a wise choice IMHO to drill today in the expectation that in 12 or 24 months or whatever, OP will be back to 80-100 USD.

XX you have a point here :) First they drilled "in hope" and then they stopped "in despair", after realizing a decent seismic was needed for a sensible infilling plan. However, the result is visible to everyone. I'm still convinced that this type of asset needs to be addressed with continuous drilling campaigns with infilling well locations identified as more information is provided by producers. After 4D seismic completion, all the tools are in place for such an approach. And the OBD exploration will hopefully support an exploration drilling campaign potentially leading to material 2P increase.

One of the slides in Kosmos presentation is about Jubilee, and it's very telling. It includes a graph about oil production over time, and some comments. Clearly KOS lays the blame over previous management strategies and in particular for the lack of drilling activities between 2024 and 2025. Likewise, for a long term sustainability of the business it stresses the importance of implementing a "regular drilling programme" of 3-4 wells per year, supported by recent seismic studies. And highlights the "material Jubilee reserve addition" associated with the incoming final approval of licence extension to 2040.

There's reason for optimism.

Agree with xxnjr OP projections are a bit optimistic considering current price. But on the other hand it is a fair assumption considering that OPEC is remaining with no spare capacity and worldwide oil production is declining fast and is not adequately replaced with new discoveries and production. This OP levels cannot be reasonably maintained for long. On the other hand I agree with Supercooper that other assumptions are rather conservative , starting with production but also in terms of 2P reserves that do not account for Ghana licence extension up to 2040 (and potential new discoveries of course). Ten lease is another very conservative assumption. Nor do I see evidence of revenues from Uganda.

All in all, nothing new in itself: current capitalization is nearly zero, and this does not reflects TLW fundamentals, but only the risk of insolvency. Once the debt issue is addressed, SP will look quite different.

IMHO these are the really key weeks for TLW shareholders. As debt expiry date approaches there is another implication maybe worth considering: potential takeovers will have to pop up as either now or never. If TLW manages achieving a sensible refinancing for the expiring 2026 note, in fact, the SP will pop-up making a takeover more onerous. This is the ideal time window for a takeover: with a SP of just around 10p, even a 20-25p offer would have some chance of being accepted by exhausted LTH. Appointment of Ian Perks as CEO is in my opinion a bit suspicious: with his previous experience in BG and Total, and the network he accordingly built over time with major O&G companies, he could have been appointed to deliver a sort of "internal due diligence" to facilitate a takeover by a bigger fish.

Just fantasies? Maybe. But one thing is for sure: the next few weeks will be the most important in the history of this once-glorious now-troubled company. GLA.