Member Info for Longish

June 18 next review date
https://www.bloomberg.com/news/articles/2020-06-06/opec-agrees-to-extend-output-cuts-as-quota-cheats-offer-penance?utm_source=url_link

'revenues from uganda won't start until 2023'
Agree at earliest. But the original imf model in 2017 was $80 for appraising the fid/ project. So to get approval at $60 suggests the imf, governments and commercial interests are baselining deals at around $60 which to my mind includes their collective 'integrated' forecasts of economic activity. So $60 anytime soon imo

'Just a hunch, but 40% at 52$/barrel hedge for 2021 may not be beneficial for Tullow.'
Think we will see $60 oil on the 2020/21 glide path. Total revenue sharing with tlw on uganda sale at $60+

'Current Market Cap of $428m and share price of circa. 30p.
I'd say that's fair value for Tullow in the current conditions.'
Could be right. Automatic entry to ftse 250 is north of £600m+ so we may be dragged up by the market, CV recovery, shorts closingng etc. All things being equal, MM's may hold around 35p pending Q2 etc. Kenya RNS and we will spike up higher imo

Ground control to major tom. Agree.

SA will set July price on Sunday. In the scheme of things, it doesn't seem like much of a dispute as demand is going to draw on increased supply anyway. Market seems to agree demand is returning...

'Personally, think worst case scenario would be bottom of the production guidance for Tullow (70k bopd)
What do people think?'
Think that is still a valid assumption. They gave 70 to 80 as a range.

slift,
'Total profit/loss = -$75m'
so fcf would be c.+$125m ie add back $500m depreciation less $300m capex and [$135m] tax paid.
$125m is then available to pay down debt, incremental growth capex etc

'Good rise today, hope it continues and update on sale soon'
Brent $38.52. All +ve. Hard to think why we would be down tomorrow. Settle back at 25p+ would be reasonable while waiting for q2 confirmation or an rns.
https://m.investing.com/commodities/brent-oil

'Very good sign and supports likely move up.'
will be interesting to see if the short% reduces over the next day or 2. In the back of my mind they are call options covering the debt. The perception that debt is less risky is improving sentiment all round. Less downside risk each day imo

Happy with that update. Was priced for the worst imo.

I suppose the great 'oil trading' opportunity is that in the same way wti oil went -ve on over supply, there is every likelihood it will spike +ve when they get the undersupply wrong for a month, and so on.. The average is hedged and fcf breakeven at $35. Worlds reopening plans should firm up end of Q2 sales and rest of the year
https://oilprice.com/Energy/Oil-Prices/Oil-Prices-Are-Unlikely-To-Break-40-This-Year.html

Great post slift

'Brent Gap up to $45/barrel for the rest of the year:
Tullow's Revenue:
Q1 - $386m
Q2 (worst case estimate) - $307m
Q3 (assuming constant $45/barrel) - $360m
Q4 (assuming consstant $45/barrel) - $360m
Total: $1413m

Tulllow's Free Cashflow (same assumptions as above):
Q1 --> +$76m
Q2 --> +$68m
Q3 --> +$119m
Q4 --> +$119m
TOTAL FCF: $382m
Plenty to service debt and put this company in a better position. Hedges has definitely saved this company for 2020.'

Oil back up $36.27
https://m.investing.com/commodities/brent-oil

LoL, added some more today. Monthend ...

LoL..$36.35 now
https://m.investing.com/commodities/brent-oil

'one Suriname farm-down with Total subsidising all our costs does not a summer make', but it would help?
Yes I agree. TLW is pregnant with possibilities. The tipping point is not far away as the pressure builds something will fold. Not me though. I would do it myself except I am retired hoping to live off the gains..

'You're probably right, but it just doesn't make sense to delay it by a whole month (1/3 into Q3)...'
It makes sense if you consider the leadership transition to the new CEO. Dorothy is ultra conservative and as I said before, it should not be ignored she is non exec on the BoE. She will not commit strategic objectives (ethics etc) unless she is 100% certain. That approach drives deep into the organisation but the operational performance is bottom up and I would think the Q2 update is a confirmation of the strategy that will carry through to £2+ integrated with the new CEO and his vision etc.

I haven't given up and topped up again today. GLA

Thanks slift, agree there are a 'nest of things'.
I wonder if the 8%+ short interest (>0.5% declared) is dominated by debt interests pending the rerate, that might explain the SP slow burn and braking effect until Uganda cash is in the bank or Kenya deal announced. As you said earlier, the rerate may require confirmation of Q2 performance to plan. If all those boxes are ticked, the SP should move to a new range, 30's at least imo.
So far the management team have delivered on their objectives but as the saying goes, 'one Uganda deal does not a summer make'