focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
I wanted to correct something regarding the gas revenue.
If I understand it correctly, the following should be taken into account
7.3 kboepd should be equivalent to about 43 Mio $ ($2.90/mmbtu) of additional revenue per year
1 barrel oil is equivalent to 5.6 mmbtu of gas.
7.3 kboepd x 1000 x 5,6 x 365 x $2.90/mmbtu = 4'327'1480 $ (43 Mio. $)
A little speculation about what will ultimately come out of the current gas deal.
Ghana's gas price is currently averaging at $6.50/mmBTU
While commercial discussions continue for the long-term gas sales, can I well imagine that in the end a profitable deal will be achieved for both sides. (maybe somewhere between $2.90/mmbtu and $6.50/mmBTU)
This would mean:
e.g. at $4 about 60 Mio. additional revenue per year.
e.g. at $4.5 about 70 Mio. additional revenue per year.
But the next six months should still deliver fantastic results. I expect more about 66 kboepd (+ additionally 20-30 Mio. $ gas???)
Whether that will be decided now or next spring is secondary to me.
What really matters is that from now on, hour by hour, day by day, the profits will inexorably rise to the sky.
I hope the larger investors also recognize this.
There aren't usually many opportunities like this.
Oil hits 2023 highs on tight supply outlook
Brent has just reached $94 and WTI has exceeded $90
Now may be your last chance to stop for petrol.
Free cash flow $800million at $80/bbl (2024-2025)
Free cash flow $ 1100 -1200million$ ??? at $90/bbl (2024-2025)
Free cash flow $ About 1500million$ ??? at $100/bbl (2024-2025)
The dam is broken and there is no resistance to be seen far and wide - free ride to 100$ and beyond.
What really counts is free cash flow and free cash flow again, and Tullow has plenty of that to offer in the coming months and years.
Tullow will make all long term holders who believe in this company rich and the short selling speculators will drown in the free cash flow.
Https://oilprice.com/Energy/Oil-Prices/Why-Oil-Could-Top-100-In-Q4-2023.html
The retreat battles of the short ones are likely to be bloody.
Greed eats brains and it is no different with the short ones they will eat each other.
Upstreamonline.com:
https://www.upstreamonline.com/finance/tullow-oil-to-generate-800-million-cash-flow-by-2025-led-by-production-boost/2-1-1517127
The half-year report looks fantastic - what did people expect?
With an oil price of $93 moving at breakneck speed towards $100, increased Jubilee production just reaching 106 kboepd (plus 7.3 boepd of Gahna gas), what is happening to the share price today is bordering on the crazy.
One of the most interesting points for me mentioned in the half-year report is that the cumulative capital expenditure (CapEX) for the years 2023 -2024 together is hardly greater than for 2023 alone.
CapEX of c.$550 million 2024-25
CapEX of c.$400 million 2023
Free cash flow $900million at $80/bbl (HY23-2025)
Free cash flow $800million at $80/bbl (2024-2025)
Free cash flow $ ??? at $90/bbl (2024-2025)
Free cash flow $ ??? at $100/bbl (2024-2025)
The adjustment to 58-60 kboepd was also to be expected - 58-64 kboepd was a bit too optimistic by Tullow, now there is more certainty in this area.
In Kenya, the Chinese and the Indians are banging their heads right now to get a 50% share in Lokichar. (Big things could be coming soon).
Thanks to all the weak hands, I got the bargain of the year today and I wouldn't be surprised if we end up green today once the market makers have had a second look at the report.
The short ones will suffocate sooner or later with 100 dollar oil.
https://finance.yahoo.com/news/opec-oil-data-show-3-121500173.html
Status quo is 22% (2022)
It seems that one or two additional wind farms will have to be built in Europe,
to achieve this goal, and of course they will have to be connected to a Petrofac yellow box at the end.
EU Parliament passes bill hiking renewable energy targets
https://www.reuters.com/markets/europe/eu-lawmakers-pass-bill-hiking-renewable-energy-targets-2023-09-12/
Markus Pieper, the EU Parliament's negotiator on the law, said it would allow faster approval of new renewable projects and encourage new technologies.
Respectively, production should increase by about 10% and revenue by about 20% (2.1 billion (2024) / 1.75 billion 2023), excluding the gas deal in Kenya. Of course, this is only an example calculation, taking into account certain assumptions, e.g. an average oil price of 90$ and a revenue of 1.75 billion in 2023 (first half 2023 is expected 0.8 billion the second half shoud be stronger (because the icreased production in Jubilee.). But that is just my assessment.
Acc. to the following report, the current daily production is 106,000 boepd (previous production rate 70'000 bopd) the share of tullow is 38.98% this means: (106'000) x 0.3898 x (e.g. 90$) x (e.g. 360 days ) = 1'339'416'000 (1.34 Billion)
resp. 106'000 (106 kboepd) - 70'000 = 36'000 (36 kboepd) * 0.3898 = 14.0 (kboepd)
https://www.businessghana.com/site/news/general/293629/Ghana-pumps-JSE-first-oil-Will-boost-revenue-economy
If I am correct and taking into account the expected decline in production in TEN and Gabon, revenue should increase by around 10% in 2024 (relative 2023).
With an average oil price of e.g. around $90, that would be revenue of +/- 2.1 billion (including hedging)
Group average production FY 2022 (kboepd) FY 2023 range (kboepd)
Ghana 44.4 48
Jubilee 31.9 (2024 +14.0) 37
TEN 12.5 11 (- 1.5) 2024 (-3.0?)
Non-operated portfolio 16.7 14 (-2.7) / (2024 - 5.4?)
Gabon 14.9 13
Cote d’Ivoire 1.8 1
Group 61.1 58-64 (Total 2024 61.1 + 14 - (3.0 + 5.4) = 66.7
At 31 December 2022, Tullow's hedge portfolio provides downside protection for 64% of forecast production entitlements through to May 2023 and 40% for a further 12 months to May 2024 with $55/bbl floors and weighted average sold calls of $75/bbl May
hedge costs of $319 million (2022)
hedge costs of about $60 million (2024) ?
(Diff 260 mil alone for hedging!)
Hedge position as at 31 December 2022
2023 / 2024 /2025
Hedged volume (bopd) 33,095 / 11,305 / 0
Weighted average bought put (floor) ($/bbl) $55/bbl/ $55/bbl / -
Weighted average sold call ($/bbl) $75/bbl / $75/bbl / -
11,305 * 75$ * 360days = 305235 * 1000 (conversion factor in kboepd) = 305'235'000 (305 Mio.)
55,395 * 90$ * 360days = 1794798000 (1.79 billion)
Total = 2100033000 (2.1 billion)
Unhedged = 2.16 billion (66.7 x 90$ x 360 x1000)
decommissioning
$72 mil in 2022 and is expected to be $90 mil in 2023 which is the last year of significant decommissioning spending.
Tullow oil is in my opinion simply a uderrated cash cow and le
Could the announcement of one or more strategic partners be imminent?
Tullow hopeful as State moves to make decision on Turkana oil
Posted on 11 September 2023 - 06:00
https://www.the-star.co.ke/business/kenya/2023-09-11-tullow-hopeful-as-state-moves-to-make-decision-on-turkana-oil/
INDIAN FIRMS IN BID TO BUY 50% STAKE IN KENYA'S $3.4BLN OIL PROJECT
Posted on :Monday , 14th August 2023
https://www.expogr.com/kenyaoil/detail_news.php?newsid=6841&pageid=2
It could be interesting for Petrofac.
https://www.adipec.com/
How frank sinatra sang so beautifully in his song
Fly me to the moon
Let me play among the stars
And let me see what spring is like on
A-Jupiter and Mars
The share price will fly to the moon and beyond. Tulow's share price is manipulated and undervalued, everyone knows that it is only a matter of time before the pressure in the pressure cooker becomes too great and the steam has to escape with a hissing whistle.
The next two months with an expected oil price of about 100$ and increased Jubilee production, with a simultaneously reduced hedging amount. Should be interesting.
https://www.ghanaweb.com/GhanaHomePage/NewsArchive/President-Akufo-Addo-opens-valve-for-Jubilee-South-First-Oil-1840820