Member Info for Longish

'Doesn't seem like an improvement in the terms of the agreement.'
The original imf model used $80 oil and reduced the government stake by c.$27bn for every $10 reduction in oil. Everyone seems to be projecting $60 now and we get 1.25% to 2.5% share for oil over c$62.

Cash in the bank, or debt teduction underpinned by the rbl facility underpinned to south america and west africa reserves seems well based and relatively certain imo

Thanks slift. You no longer invested but staying close!?

In the circular they adjust borrowings to include cash and cash equivalents so net debt becomes $2.8Bn.
Adjusted ebitda becomes $1.4Bn.
Gearing is 2
RBL Gearing Covenant Test is 3.5 over 12 month period.
Looks pretty good to me?
https://www.tullowoil.com/application/files/6715/9247/0563/Circular_Final.pdf

performance should be on plan. A quick read of the Uganda transaction circular and it says:
'As of 31 May 2020, Tullow had approximately 60 per cent. of its 2020 sales revenue hedged with a floor of approximately US$57/bbl and approximately 40 per cent. of its 2021 sales revenue hedged with a floor of approximately US$53/bbl. Tullow’s realised oil price for the five months ended 31 May 2020 was approximately US$52/bbl including the benefit of approximately US$111 million of net hedge receipts during the period. '

So, including the bottom of the pandemic, TLW still managed an average of $52/bbl over the 5 months!.
Fantastic. Free cashflow breakeven is $35/bbl. Roll on TLW.
Good weekend all

'It's very risky not to sell the assets. Tullow MIGHT just be able to survive without the sale, but it would mean no growth opportunities for 2021 or 2022.'
Agree. They probably can make it without the sale. There is a whole portfolio of risk, not just the $1bn portfolio management target. The way tlw has presented its strategy indicates the sale is the optimum glide path from the whole portfolio. Looking at a map, sell the liability to east African infrastructure liability/ pipeline builds etc and concentrate on west coast, south america imo

Think $45 possible and wti $40. We are 60% hedged this year in any event
https://www.investing.com/commodities/brent-oil

'how do we vote?'
BoD recommendation imo. When all the administrative boxes are ticked, we also get a credit review rerate. All +ve to the upside imo.

If a bid materialises, i think we get more than todays SP.

What is a likely bid price? Samuel starting buying in the 60's I think.

'the Tullow Board unanimously recommends that all shareholders vote or procure votes in favour of the resolution'

..'procure votes' sounds provocatively like last chance to bid?

https://momr.opec.org/pdf-download/

Also, 'Oil prices pare losses as U.S. crude supplies edge higher and product stocks decline'
https://www.marketwatch.com/story/oil-prices-retreat-as-investors-await-inventory-reports-from-opec-and-eia-2020-06-17

Was looking back and came across this post as we are due a (positive) credit rerate from Moodys next month..

Moodys said...

WHAT COULD CHANGE THE RATING UP
A rating upgrade would require (i) confirmation that the production guidance reset by management in December 2019 can be sustained in the medium term; (ii) material progress on the divestment programme allowing significant deleveraging and resulting in Moody's-adjusted total debt to EBITDA falling below 4.0x and (ii) restoration of a robust liquidity profile.

mrJimV,
Ah yes, I agree. In my post I was thinking about derivitives unwinding on the 3rd friday of each qtr end and what impact that has on tlw SP. Will be interesting to see.

Agree tlw revenue is hedged 60% in 2020 with freecashflow breakeven @ $35 oil

'Anyone know when hedged oil price runs out and how will this affect the share price'
For this qtr, friday is the 'witching day'. Still a bottom drawer hold for me.

nearly back to $40...
https://m.uk.investing.com/commodities/brent-oil

Dont think we will see a 'common' 2nd lockdown policy across the world. Each country, like each countries economic portfolios, are unique and will emerge at their own pace relative to an economic pandemic least cost glide path [financialvand non financial costs]. Demand will increase, oil price will find a new equilibrium (more than $35 imo). TLW revised guidance will be tested in Q2, Q3 and Q4 against that demand recovery glide path for its legacy and new customers.

Many companies still to face their earnings shortfall reporting seasons where tlw has bitten at least one bullet already. Aimo

slift, 'That presentation (although provided in April) is outdated or they have made a typo. '

LoL, we will never get to the bottom of that one. .. I bet 'Dotty went potty'.
If you watch the agm near the end, Les looked absolutely knackered getting the plan over the line...been there!

With luck, 2021 is a wash.

'Tlw hedging is it for calendar year or financial year?'
60% for the current year ending 31 December 2020
30% for ye 2021

Think the cost is c$2-$3 pb so if breakeven at $35, lots of tactical upside risk management opportunity for tlw

28 April Summary. Nice easy read
Slide 16 shows the debt maturity dates and why we can be more positive than negativethey can be serviced. For example, the RBL facility doesnt mature until 2024. Demand recovery and cashflow +ve over the timeframe in any event imo.
https://www.tullowoil.com/investors/results-reports-and-presentations/

'Might be better announced when oil is over $45'

Interesting when they decide. The Moodys credit rerating review was due in June and dependent on the RBL (done?), the Uganda sale (done?). Do they need Kenya until end of Q3 or Q4? Think they are planning $60+ in Uganda and probably same in Kenya. $45 oil might not make a difference given its a project running for 25 years starting in 3 years time.

If it was me, I would get it in asap, cash in the bank and move the focus to production, development and growth. Could land at any time imo

How do you know it must be close?
Published information on. Inclusion in the portfolio management activity of $1Bn. The Uganda sale proof of concept. Original announcement in January. 6 months left in the Financial Year. Its close. Timing I am sure is in the good hands of the management..
https://www.reuters.com/article/us-m-a-oil-kenya-idUSKBN1ZM1FZ

must be getting close. What will it do to the SP?

Wonder if slift got back in today

Ftse 100 futures at resistance. S&P500 same..green...?
https://m.investing.com/indices/uk-100-futures