Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
11 likes on my latest post, I feel dizzy, should I become an influencer? :)
The algo ***** can be revealed: q u i n t u p l e.
This by the way bodes well for all energy sectors, especially energy storage, smart grid solutions and maintenance...there are some ETFs but are very small and illiquid, just saying. As for entry level I have no idea, I am using sub 33 but what do I know, my TLW equity position is still small, about 25% of one year coupons on my tullow bonds, and starts from a very wrong 52p all the way down to 31....patience folks this is not going to rocket anytime soon unless Anton digs a motherf****r secret post or one of our lovely African govvies takes any damn decision.
i read that ai alone by end 2025 will consume as much electricity as japan!! and that ai energy consumption is expected to *****uple (!!!) by end 2030. jp morgan has just released paper stating that real reduction in oil and gas annual consumption worldwide can be achieved only in a few generations (!!!) let's take the blinders of mass media b/s off and be realistic: our little tullow will have a very good fcf for many years to come, and once debt reduced all value will go to shareholders. build up on weakness instead of hoping to get rich fast :)
hi all. i am all for jokes pokes and banter but if you scroll the next 4 pages of this blog you can hardly find anything of relevance or even mildly stimulating arguments. i think it is becoming irrelevant, *****y and to say the least childish. pity.
good luck all.
OP going to stay high or even go higher, there is little doubt given world messy state, and messier by the day. $5 over budget $80 level at say 50% hedge net translates into approx $5 1/4 mln extra free cash flow a month, more than $60mln a year. This justifies at least a 15-20% share price appreciation, so 38-40p is in sight, more than a fall back to 25 for sure. stay tuned....if Goldman oil prediction of $100 then...booom
Hi stadium, I do not know is the short answer but a few points:
The cost of the facility is 10% over whatever short term rate over the drawn period, we can reasonably assume that by March 25 short term rates will be much less than 5 percent so overall cost will be less.
In addition the facility can be partially repaid at any time with cash flow, so when you draw it you are not bound to pay for the full 5 yrs and if you use cash flow to part repay you no longer have the related cost.
If things continue to go the way they are TLW could in the next few months be able to get cheaper funding from the market, as cfo said there are a multitude of refinancing options that they will monitor, stay put.
Hope this is useful
Well well. As I always say, the fixed income market is much more sophisticated than the equity one, and since my last post of a few days ago both the 25 and 26 have posted gains of about 4 points despite a rise in USD yield curve, a remarkable rally in terms of price and spread. Not only the 25 at 97.5 confirms the view that redemption at par is a certainty but the 26 at 94.5 is a testament to market beliefs that refinancing is now perfectly doable. This in my personal view clears the way for sustainable equity appreciation in time. I would argue that investors should start building up on TLW equity on any corrections thru 2024 because we are potentially looking at this share to explode from 2025 onwards, even without Kenya gift. Rahul has just to keep doing his cautious job, I am long and wrong at 50 but looking to average down at any blip, which will happen no doubt as we all well know 😉
Hi chaps, for clarity: the 2025 was junior to the 2026 in so far as company cash flow could not be used to repay the 25 without 26 approval. This has been resolved with buyback and glencore facility as 25 will be repaid at par with a loan that matures AfTER 2026 so secured bondholder'rights are safeguarded. This is why is now the secured bond that yields more than the unsecured, counterintuitive isn't it? The refinancing risk is now all on the 26, the 25 is done and dusted, but is a risk that with prudent management market is starting to like
No big surprises from the results, and I think the current valuation reflects fundamentals and I will have to wait at least 12 months to see the blue on my small holdings, while getting handsome interest from the bonds. My guesses:
1. Forget M&A. The company still has a negative equity of $360m, liabilities exceed assets, so a $400-500m capitalization is an adequate goodwill of >800m for a company of limited short term growth AND a potential maximum tax liability in excess of $1bn! As a potential suitor, I would not touch it until more clarity appears.
2. Good housekeeping: agree with previous comment, CEO is doing everything possible to put company on solid ground for future growth, we need to be patient. All comments about RD doing everything for bondholders and nothing for shareholders are nonsense: with assets
First of all thank you all for your well thought inputs. We are albeit slowly raising the bar again:) SA I am not disagreeing with anything you say, but you are not showing points that can produce a big uplift today, they are all possibilities with various degrees of probability that if and when they can become probable will have a sure positive impact, my thinking is not for this year but probably from 2025 onwards. I as you know was and still partially am long tlw bonds, but at the original buyback I also purchased some shares at 51p on average; I am still holding and not trading, I was expecting a much faster recovery but prudent management and unambitious growth prospects (the same reasons why I so much love Rahul for my bonds) are making me much less bullish in the near term. If any of your catalysts events materialise....bingo! A last note on your debt comment: leverage is very good when cost of debt is less than cost of equity. This is currently not the case for tlw (as all you shareholders with no cap gains and no dividends for donkeys years know) and it will not be for a while.....love you all
I hear a lot of complaints about a mere usd500m valuation in view of sizeable expected future cash flow. In reality the market is already valuing the company in excess of 2 billions once debt taken into account; this is no peanuts and with investments capped for next 3 years and production only slightly up (IF turkana outstrips TEN dacay) I do not see where upside could be, except Kenya miracle, Ghana tax or gas surprise or oil in the 100 area. As said before, long term bullish but 2024 a non event, trade the range if you are fidgety gla
Hi all, just back from an 8 week spell in the french Alps, lovely snow and weather conditions, and food & beverages courtesy of TLW's bonds rally :)) I thought that with debt problems solved and stable production with expected sizeable cash flow the share would have started a slow and steady upward movement, so why this is not happening? I can think of the following factors and looking for your constructive thoughts:
Rahul made a confident statement about the sustainability of the 100k production, BUT has signalled a virtual stop to new dwelling beyond those already planned. This, on one hand, is stopping production growth and obviously disappointed those investors betting on increasing revenues. This is very conservative, which in my mind brings me back to the mother of all reasons: DEBT. I think that the market, now that the 2025 is not an issue any longer, wants to see months of stable production underpinning a smooth refinancing of the 2026, which is still quite sizeable. More importantly, I believe that the Glencore facility has some strings and bells attached to it that we are not aware of....think about it, I am funding a company with 400m of debt which will become JUNIOR to the new bond issued in the 2026 refinancing, as this will likely take form of guaranteed debt. I want therefore to make sure that most of the company generated cash flow is set aside to guarantee MY repayment in 5 years time. So do not waste cash in new wells bets but in repaying me. In addition, I have the risk of a potentially adverse tax arbitration that could put my full repayment at risk; I do not think in dramatic adverse event, but I think that Ghana will play the tax penalty v. the price of long term gas supply agreement card very well, so I am not expecting Ghana gas to add a lot in terms of revenues, as it will be measured against the tax claim, one way or the other.....the lower the penalty the deeper the gas discount. So, I am left with shares in a company that is forced to cap its growth to put its funders to rest. We will own shares of an ever stronger and solid company that remains at the starting blocks, every day its balance sheet will grow stronger but it will hardly translate into its share price. I feel therefore that TLW is a long term buy, shorting at 30 does not make any sense, but owning at 40 neither, for the whole of 2024. GLA
The tender 2025 has closed with less than half the available acceptance level. Investors seem happy to hold until maturity a fully funded bond which still yields 16%. I think capital gains on bonds will be limited to time decay (prices will tend to par as maturity approaches) and they have become a nice positive carry trade.
As usual, fixed income market is much sharper than equity folks (:)) and has reassessed company fundamentals in a timely fashion. We should now start to see a changed sentiment by equity slow coaches.....GLA
I know it's somewhat frustrating and disappointing, but let's put it in perspective: last 30 day performance
BP -7.8%
Shell -3.7%
Total flat
Exxon -1.5%
TLW +8% ......there is light at the end of this very very very long tunnel GLA
2025 $130m tendered of 633m outstanding. 2024 $114m. I do not know what has been used to pay for the 25 but CFO stated 2026 paid out of cash on balance sheet, so NO DRAW DOWN of the Glencore facility, a bold statement of confidence in future cash flow generation capability. Keep going and Anton, keep digging your obscure valuable info!
Usd 200k nominal (much less when they were in their low 60s...) through any major trading platform or private bank. I think you need to be considered as a professional or experienced investor to be allowed to buy given their intrinsic high risk. Not for the faint hearted in the past but now the 25 at 16% plus yield for 16 months and fully funded redemption is a much more steady proposition. A lot of members of this chat should be eligible from what I read
Hi Anton, a very good question that I am asking myself, as holder of both the 25 and 26. To put it in perspective, I tendered my 2025 position at 67.5 but was not taken up as the highest marginal repurchase price was 65. I then sold half after Glencore facility announcement just shy of 90, and I think I better hold what's left until maturity as the risk/reward ratio seems (always use seems when TLW is concerned!) much more favourable. So the question is why Rahul is doing it? In addition, as previously warned, S&P has downgraded the bonds to selective default, a technicality due to the fact that bondholders do not get the full price which is one of the events that trigger a default, but anyway a negative effect....
My feeling is that the announcement of the facility and the name of the lender have produced positive ripple effects that far outweigh the economics; we were all expecting banks to balk at any refinancing requests and put up whatever extra guarantee demands and instead we get a huge oil market player with big pockets, it is an amazing outcome that has caught everyone by surprise, chapeau! Now the market knows that the 2025 is done and dusted and the 2026 has serious good chances to follow thru, and so we are back to simple economic calculations and significantly reduced credit risk ones. This is why TLW has been very careful to cap the maximum purchase price of the 25 (this is the real buyback as it is for up to $300m v $100m max for the 26) at 92 plus 50 cents for early acceptance, which would still represent a saving of a few points compared to the cost of the fully drawn facility. I think Rahul does not expect the tender to be a great success but if this happens is because the market has done a u-turn on TLW's credit risk and nothing else. I even think he does not want to be a success, because let's not forget that if he does not draw on the Glencore facility his cost on the bond stays at 7% until maturity, only the cost of coupon, free money these days!! Hope I could be of some help, but I am no Gospel by all means GLA