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Shell no longer buying spot russian volumes.
59 looks like a technical level we need to break
https://www.theice.com/products/219/Brent-Crude-Futures/data?marketId=5166946
Here is the forward curve. pretty sure they are only 50% hedged next year, so now they can sell at 100 oil for next year. Pretty sure the share price is not reflecting this.
People just look at the front month contract and assume oil contracts across for the next two years are at the same level, when actually the oil curve is in backwardation, so front month would need to stay high for a long period to see a huge re-rate. For example the Nov-22 contract is $86.
Needs to be sustained.
https://www.moodys.com/credit-ratings/Tullow-Oil-plc-credit-rating-820489619
Sorry if this is a repost
This wont keep delivering double digit growth, thats the point. Headwinds......
Sorry for the poor grammar and spelling, wrote it too quickly.
I think fair value is probably closer to 1200-1500p, the rates market is beginning to price more aggressive interest rate rises as we move from a 'transitory' to more long term inflation period. There will have continued pressure on input costs for longer. This sector is very price elastic with it difficult to pass on higher costs to the consumer, especially when the consumer will be feeling the effect of higher prices. So margins will be squeezed and demand for the goods will decrease. I think there could still be up to 50% downside here worse case.
Yes its depressing. I'm a nat gas trader and the cal23 onwards is moving up, so high energy bills are going to be around for a while.
I meant oil is a good hedge against inflation up until the point where inflation impacts the economy and overall demand.
I hate these sorts of comments, but I truly believe this is becoming a screaming buy. Oil market structurally very tight for next few years combined with high inflation that I believe the market is pricing. Main risk is high inflations affect on the economy and demand.
Kampala, 1 February (Argus) — Uganda's journey to become a fully fledged oil exporter has reached a key milestone with an official ceremony in Kampala to mark the final investment decision (FID) on a project to develop oil fields in the Lake Albert basin and link them to the Tanzanian port of Tanga via the world's longest electrically heated pipeline.
Ugandan president Yoweri Museveni, his Tanzanian counterpart Samia Suhulu Hassan, TotalEnergies chief executive Patrick Pouyanne and Chinese firm CNOOC's president Jian Liu were among those attending today's ceremony for the official launch of the 230,000 b/d Lake Albert development. The project involves developing the TotalEnergies-operated Tilenga field and the CNOOC-operated Kingfisher field in Uganda and building a 1,443km pipeline to transport the bulk of the crude output to Tanzania's Indian Ocean coast for export.
TotalEnergies and CNOOC in partnership with Uganda's state-owned oil firm UNOC have committed to spend around $10bn on the development — $4bn on Tilenga, $1.6bn on Kingfisher and $3.5bn on the pipeline. TotalEnergies holds a 56.67pc share in the upstream development, CNOOC has 28.33pc and UNOC 15pc. The ownership stakes in the pipeline will be 62pc for TotalEnergies, 8pc for CNOOC and the remaining 30pc will be shared equally between UNOC and its Tanzanian counterpart TPDC.
Exports of Lake Albert crude are due to begin in 2025. A portion of the oil output will be earmarked for a new refinery in Uganda.
"Today's FID signing has put the country on the right path to achieving first oil in 2025," said Ugandan energy minister Ruth Nankabirwa. "The country is more confident today than before as we aim higher to achieve our vision to produce oil and gas."
The Lake Albert project has been beset by delays for several years. Protracted negotiations over upstream contract terms, a series of tax disputes, disagreements over the crude export route and uncertainty over the economics of the new domestic refinery initially held up development. More recently, the effects of the pandemic and intense lobbying by environmental campaigners to try to persuade banks to withhold funding support for the pipeline has put the timeline under pressure.
"We are fully aware of the important social and environmental challenges it represents," TotalEnergies' Pouyanne said today. "We will pay particular attention to use local skills, to develop them through training programmes, to boost the local industrial sector in order to maximise the positive local return of this project."
TotalEnergies said it is committed to implementing action plans that will have a net positive impact on biodiversity. "In close liaison with the authorities and stakeholders concerned with nature conservation in Uganda and Tanzania, these action plans will be implemented in collaboration with neighbouring communities and under the supervision of an independent institution," the firm said.
Note from Friday:
Investment Thesis:
Tullow has made significant progress in reducing its debt burden, through disposals and organic cash flow. The recent refinancing means equity dilution risks have abated. TLW’s long-term business plan earmarks the majority of capital for debt reduction and sustaining production on the producing assets. TLW has limited capacity to grow its business if oil is at $60/bbl but as the market tightness, it should generate sufficient CF to fund some of its growth either through exploration or development of Kenya. New management now has more time to reshape the business in their own vision, from a shareholder’s perspective this will take sometime to deliver, but given improving macro and limited reflection of the accretion from Ghana pre-emption, we see a favourable entry point. We rate TLW OW.Valuation
"problem is from the recent trading update is if oil hits $120 then most shareholders will feel pretty sick as its mostly all hedged away at low oil price. they need new oil to see major upside or buy out someone or wait 1 maybe 2 years for hedges to end. still think they are doing a good job, maybe calm down a little on hedging in 2022 and talk more about reducing debt as fast as possible." This is complete rubbish.......
Well put sandy. Completely agree.
We should be up 5%+ off the back of the call today.
What are you on about.... the number of clueless people on here amazes me.
SUPER PUMPED!
All that is happening is the shorts are trying to protect their position by averaging up. We have had a big move up, they took some off the table and now trying to short it again. Ultimately providing you believe oil is likely to stay at or above this level, you wont lose money here.