US production won’t drop like a stone. Even at $40 WTI it might stay flat. But that’s still a far cry from the >1 million bpd it would have grown by with oil at $65.
You’re not wrong there Dodger, Russia have been getting carried without making any real cut at all through this whole process. I’d be surprised if they ever reduced production by a reasonable amount even if they agree to something more substantial. It would make sense if they did though, you shut in the least profitable production anyway, stuff that’s near end of life and of lower profitability. Higher oil price and lower breakeven, win win. Let’s hope reason wins through today, otherwise most of us are up **** creek.
All eyes on whether agreement between Opec and Non-Opec can be reached today. If successful, the deal should put a $45-50 floor on prices and leave upside should the virus situation progress better than expected. Failure to agree a deal could mean as end to all cuts, which could send Brent below the 2016 $28 low imo. Huge day.
Nickel: reply to that tweet says this:
‘$330 million FCF in 2019 with Brent at $68 suggests this is wrong.’
I’m inclined to agree. In the presentation it states that $5 dollars in oil price adds $60m in FCF. 330/60 =5.5, which suggests they would have generated 0 FCF at $40 Brent (68 realised minus 5.5*$5 = 40.5).
They are spending more this year, but I think their break even has got to be much lower than $65. Add in Zama sale hopefully before year end and large debt reduction is guaranteed while still developing growth opportunities.
Ferret, welcome back, interesting first post. Did DBNO steal your login info?
Last time oil was down here we were in the mid 50s share price wise. So there’s certainly been significant improvement, unlike several other peer companies.
Sub $50 oil feels a near certainty now, but how much lower is the question. Hoping we don’t see a price starting with 3! At $45 Brent, WTI is circa $40 which is a bloodbath for shale.
One sibling is a doctor. Let’s just say, based on their experience dealing with a potential Coronavirus case (which subsequently turned out to be one of the very many false alarms) any suggestion this country is well prepared is incredibly far from the truth. I suppose we’re just not quite as bad as Italy and the Far East, which isn’t saying much.
That’s not the proper name for it.
Little concerned that Pemex has put the breaks on someone signing on the dotted line for Zama. Stuff like this shows why it’s best to monetise discoveries in countries that can’t be trusted.
Hunter, I suppose ARCM not being involved in the placing could provide a short term spike if they close their position, true, which would likely settle (hopefully in a materially higher range) after some time. My point however is that higher range should come about regardless of who gets which shares, as it will balance out past the short term.
Not sure it particularly matters one way or another if ARCM take part in the placing. Either way, we have about 40% more shares coming our way. We also have about 20% of our shares that need to be bought back at some time or another. Those fundamentals don’t change based on who is involved in the placing and who isn’t, so involvement of different parties won’t affect the SP. What it will affect is how much damage ARCM is able to limit on their short.
Isn’t it something like 1.5 bbo over 7 intervals? Even if each has as good a chance as 1/2, that’s a <1% chance of finding the full amount. Still exciting, but just to temper the ramping of AIM managements.
Hess is not the norm. Hess and partners have found billions of barrels of oil in world class reservoirs in a highly attractive fiscal regime offshore Guyana. Other shalers don’t have the option to switch to these sorts of projects.
Shell below £20 for the first time in years. BP suffering too. Don’t think PMO has done too badly considering it moves more than others with oil normally.
On a side note, dividend yield approaching 7.5% at shell, starting to look quite tasty.
Olliesky, oil is down nearly $15 from its recent peak during the Middle East flare-up. I’d hardly call that no bad news. That PMO has only dropped 15p or so in that time is a minor miracle in my eyes.
At least those questions have some validity (as opposed to the first bunch). Still, as I mentioned before, WoodMac valued these fields at more than PMO are paying not factoring in the tax losses.
How far is it from Hong Kong to Wuhan as the bat flies?
Apologies if this has been shared already: https://www.thetimes.co.uk/article/premier-oils-attacker-reported-to-regulator-2n0tm7bhs#
I was expecting 350-400m new shares. Anything less than that will be a bonus I suppose. I suppose we need all this court stuff to be wrapped up first, so earliest we might hear is March? By then the share price could be +/- 30% from today knowing PMO.
This is correct Tuscan. Final acquisition price should be pretty much covered by the $500 million equity raise due to adjustments.
Couple points:
Woodmac analysis of the BP deal gives it an NPV10 value of over $650m, which we will end up paying a lot less than, plus the highlighted that this didn’t factor in the significant additional value of our tax credits. So it seems like PMO got a good price.
Also think if Zama comes in selling for over $400 mil (pretax) this could jump to 125-130p. Less than that and I think it might be a sell the news type thing. Let’s see.