Member Info for InJamesweTrust

Fernan
QP have signed a aide agreement as change not yet approved by Guyanese government. The original agreement changed on Total exercising their option requiring the approval of the Guyanese minister. His approval is an RNS from Eco. He wouldnt waste time to approve something with no changes and Total wouldnt sign up without being happy about the options open to them I'd imagine.

Fernan
If you were Total would you sign up to that? A smaller player might but Total - I seriously doubt it.

Pro
Dont believe the levers of control are only Tullows to push. They may have had a partner agreement giving them.power over Eco but Total wouldnt sign up to such and hence believe any standstill from Tullow will be accompanied by a step in provision for Total and Eco.
Remember, Eco has Africa oil to help pay for a drill but it would cost Tullow more tha 1% of the licence.
Incidentally, Tullow COO stated on conf call Suriname can be done late 2020 or 2021 depending on priorities.

If folk here want to see some action to move the SP, it is pretty simple to email Tullow IR en Masse and ask for the deferral of Suriname in favour of drilling on Orinduik.
Tullow hold 60% of this block and could prove the story for 2.4bn barrels net to them of likely light, sweet oil. The potential to then farm down for cash and a carry is a major deal. The sweetener is time to production means they can include the first field in their 3 yearbook forward once drilled which if they retain 20% of 220k barrels per day is more than 50% of current production

Shpunken
I think that would be the solution that suits all parties the best for sure.

Hi Noix,
Yep, this is based on the cost of other wells at a similar depth, Tullows well in Peru is expected to cost c.$28m. The CPR I think states Jethro was $50m, I understand Iatuk D is a simpler target and wouldnt cost as much.
The $120m figure was the Gross drilling Eco.could support and the two well campaign was originally expected to cost $80m. This was an appraisal of Jethro and a sidetrack to test the channel which is more complex and hence $50m and a drill in the Cretaceous (the remaining $30m of the $80m budget quoted).
While Jethro is likely commercial, the concentration of any drilling will be Cretaceous as this is where the bang for buck is now for all parties. Tullow probably have around $10m available (if they drill Suriname) while their share is around $17m. How to bridge the gap of $7m is the question for OpCom sometime in February.

Noix
Provisional budget was $80m for two wells but the revised seismic has likely reduced the cost of single well to a good bit less than half that amount.
Think meeting is soon also and Tullow arent the only ones holding the cards I would say. Not sure decision will come next week, may need to wait until new CEO at Tullow but expect there to be a strong push from partners to drill in H1/early Q3.

EAS10
Impossible to be definite, however looking at the opportunity set as a Tullow board, I would struggle to see anything capable of shifting momentum as 2 drill programme here.
How can this be achieved - Tullow has spare capacity in its 2020 budget
Tullow could novate its interest in Hammerhead to Total/Qatar with a buy back at a premium for being g carried.
Total /QP/Eco could carry Tullow to varying degrees for risk/reward basis.
Nothing is beyond the wit of man. Given the CC agenda, majors will need to sustain their SP by having increased cashflows to support dividends this is only achieved by investing and this is a ready to go asset which can be monetized more quickly than almost anywhere else if you listen to comments on Hess call last week.
So I think there is a strong push all round that drilling sooner benefits all. Tullow may be playing the game to see how strong those drivers are to their partners. Ecnomic game theory.

Pro
They will decide when to drill whether it is H1, H2 or 2021. Having a late 2020 drill as a possible doesn't restrict them. Let's see what comes - when they drill there is a major prize to be had if successful. Based on the geology around them that is pretty good odds.

Shpunken
Just looked at the Tullow presentation, does state that full business review underway as year progresses which will as required update their investment intentions.
Time will tell for us...

Pro
Sorry I seem to have missed it, I wonder if you could advise when next drling is by you're reckoning!

Phoebus
Despite taking some profits out at 172 and 154 or thereabouts I remain disappointed with subsequent events also. I am most disappointed at economy of language from Tullow when the fields can be made commercial. Have a look at the accumulations now named Jethro something and it is nearly 800m barrels with 54-100% CoS.
Tullow ex.mgmt are foolish for over extending themselves always looking for the next acreage, opportunity and leaving themselves.short of funds to develop what they have and concentrate on effective Ops. This I think is a big part of why they went.
They cant not drill as the prize here is bigger than anywhere else in their portfolio, evidenced by the 3 fields together in the late mature Cretaceous sector.

The sulphur is mentioned and is deemed to be a geological formation issue due to source rock and migration patterns. API mentioned also here.
Have you read the report....

The CPR is a very positive development, proselenses seems to forget it is the same document as gives 88e the view of their prospects which incidentally have a lower CoS - spot the irony.
News on timing of drilling is now important but on a risked basis this now represents a significant value opportunity. The risked Cretacous potential resources are 1.2bn barrels or 180m net to Eco - this is risked based on CoS.
Total has already paid $2 a barrel for a similar opportunity on Apache. The risked TP of this should now be about 210p a share based on $2 a barrel which is a 60% discount to the $5.20 used in previous reports by Pareto.

Drilling the Kumakka and Iatuk targets, hitting through DJ on the way down could confirm 1.7bn barrels - so a billion barrels of light oil net to Tullow. Drilling these would yield a huge return to Tullow for a net cost of $40m.
They have around $30m capacity in the exploration budget....

Travelling so just initial look so far, ths risked (by CoS) barrels are
550m barrels Tertiary
1,187m barrels Cretaceous
That is 82m barrels net Tertiary and 180m barrels net Cretaceous for Eco risked and 765m barrels gross.

Hopefully as February starts the CPR is finalised and made available over the next 2 weeks.
This is the month when the partners are due to convene to discuss their options too.
Positive newsflow from the first almost certainly and interesting politics driving the 2nd.

Incidentally, market cap is higher at 88E but we have 400m barrels of discovered oil they have a few teacups.

I'm kind of curious how 88e is preferable, drilling costs and logistics in Alaska compared to Guyana? Lower cretaceous prospect looking for 27°API oil with a 20% chance of success. Drilled a field last year and couldn't get oil to flow.
We have 16 of 18 discoveries around us 3 on our block a huge discovery in Suriname nearby and data in the Cretaceous to help us model targets.
Where would I rather be.....

Jez
I cant tell if you actually still hold or not?