Member Info for Longish

£1.4m...31.8p

Slift,
I guess the $430m (historic accounting cost, not cash) is offset by avoiding, say, $0.7Bn FID costs etc.

The $3.1Bn borrowings at 31 Dec 2019 less cash and equivalents $0.3Bn = $2.8Bn at 31 Dec 2019. The Uganda proceeds $0.5Bn get net debt to $2.3Bn. Then there is 6 months working capital to adjust which we will know at the end of July. There will be a net +ve step change due to discontinued activities imo.

Where do you see an increase in gross borrowing at 31 May?

'The Transaction also remains subject to a number of other conditions, including customary government and other approvals and the execution of a binding tax agreement with the Government of Uganda and the Uganda Revenue Authority that reflects the agreed tax principles previously announced. Subject to the satisfaction of the conditions, the Transaction is expected to complete in the second half of 2020.'
When all those are complete....60p+ because there are other deliverables in the timeframe including Kenya, new ceo, oil higher, CV lower. I cant see the Uganda deal being rejected at all...

Slift, agree with Dent.
Having said that, your fair value today has slipped to 30p when the Uganda sale against the 31 Dec 2019 balance sheets gives net assets of 33p before March RBL determination, new CEO, cost savings etc. Why you slightly less positive (but still positive)?

'Because the future is green... I don't what are you smoking but I want some of that too.'
I dont make the rules. The grass is always greener on the other side apparently.

15k. Onward and upward imo..

brent back over $43.
https://www.investing.com/commodities/brent-oil

LoL, I would get tgat trade wrong. Staying put and review again post Q2 performance etc

Canary, kenya too. Decommissioning mauritania, redundancies, portfolio management etc

At 8p it was massively under valued. I was a buyer that day but unfortunately not much cash in the piggy bank because the whole market and my portfolio similarly priced since march 17...so that day, tlw investors feared the worst ie having to fund projects like uganda that it could no longer finance. Uganda sale has confirmed there is a vety (conservative) profitable future with +ve cashflow and free cash flow over $35 oil

'That's a valuation not SP'
Divide total value by 1,410m shares = SP. The market price is what people are prepared to buy or sell it. $575m for uganda was arrived at using 14% discounted cashflow rate according to the circular

'Is based on supply and demand not on future cash flows.'

https://www.investopedia.com/articles/stocks/08/discounted-cash-flow-valuation.asp

The SP is the net present value of all future cashflows. The way the market is wired to tlw performance, a sale price of $675m or $775m makes no difference imo. It has to be the execution of all elements in the strategy including approving the sale of uganda.

I vote sell for reasons given. I started buying at 164..uganda sale will lead to a higher SP imo

'We are not spending much on exploration now'
In the 28 April overview, tlw describes 'disciplined exploration in africa and south atlantic margins'. The old ceo and operations director apparently were not great financial stewards of tlw's finances.
https://www.tullowoil.com/investors/results-reports-and-presentations/

Canary
'Any numbers that makes sense to you to justify selling Uganda for 575$ millions'
We discussed this 23 and 24 April. Neither of us changed our positions so we are consistent :-).

One post I responded said..

'Turning Uganda on its head. They used [12%] discount rate (14% in the IMF doc). But we currently have ultra low interest rates for longer, and unconstrained monetary policy...

$575m is on average $23m for each year of production,

$23m in perpetuity at, say, 1% = $2.3bn
$23m in perpetuity at 12% = $192m

So we are >$2bn better off with the cash now in an ultra low interest rate environment. Using it to pay down debt must increase the horizon value more than the net asset historic cost..?

'walk me through your numbers whenever you want'
Sorry Canary, which numbers in particular?

'You are not thinking rationally.'
Rational economic man doesnt exist outside of economics books. 'Pickens' as far as I can tell was interested in US oil/ gas/ alternate energy prices, not uganda's sovereign economy.

Another way to think about it is uganda oil is worth <$2 bl whilst still in the ground ie P2 90% probability its all there..
Getting it out of the ground, building pipelines, starting production in 3 or 4 years time...$575m is good value given the challenges over the next 3 years, plus revenue share if oil > $62 in 3 years time.

Deal needs a simple majority. Any individual interest or interest groups will need bid to stop approval imo