Member Info for Longish

'concealed it's inability to weather plunging oil prices'
TLW is hedged against low oil prices. Also the production forecasts lowered to 70k+ bpd this financial year

'Tullow will only reveal that at the trading update, or with other significant news.'
I guess that's fair given they lost trust in 2019.
I guess the same risk will impact the recovery stocks when they report Q2.

When do moodys review the credit rating in june? The rbl and the sale of uganda criteria for a rerate have been met.

'But ofcourse, this will only be good if inflation is high. Deflation and we're in trouble.'
If deflation, it will probably be because of -ve or zero interest rates. Paying down some debt and refinancing at lower rates is another option ..

HMMs,
I know what you mean about institutions. Never the less, the market conditions are such that if Mr Micawber where alive today he would probably say, imo, 'Marginal revenue twenty pounds, marginal cost nineteen pounds and 99 pence, result happiness. Marginal revenue twenty pounds, marginal cost twenty pounds and 1 pence, result misery'....

'In the 17th edition of its annual review of global oil and gas production, Goldman Sachs said the changes underway would lead to “a new equilibrium reminiscent of the 1990s”.
“Consolidation, capital efficiency and higher barriers to entry dominate the search for a new equilibrium in the oil market,” the bank said in its report titled Top Projects 2020.
The driving force behind a return to conditions seen 30 years ago will be demand from investors for higher profits as well as lower carbon intensity.
Goldman Sachs said it has identified a turning point in the oil and gas investment and production cycle that is arriving seven years after the 2014 oil-price peak which signaled the end of non-OPEC growth.
This picture of change was similar to that seen in 1987 with a period of change occurring seven years after the peak in the 1970s oil-price cycle which led to a period of consolidation, capital discipline and improving corporate returns.'
https://www.hellenicshippingnews.com/back-to-the-90s-for-oil-says-goldman-sachs/

Interesting link from Uganda's perspective. TLW has bitten the bullet and moved on. The business has been rebased. RBL facility and revenue hedges have secured the next period of consolidation and, if oil recovers, growth.
Brent back up over $35 this morning.

'So is Uganda government is asking $1 billion + as tax? '. As I understand it, no. The URA has waived the tax, the FDI is not agreed, the pipeline is not built, production is 3 years away. TLW is recovering its development costs etc and the benefits and liabilities will now accrue to Total..

This dispute seems to be whether the URA has authority to act. In an earlier post citing a decided case, the URA was determined to have that authority.

I am not an expert. Just trying to understand it like everyone else..

'Is it a coincidence that the share price has been in limbo since the new court case was raised?'
I don't think so. The issue here seems to be about interpretation of a double taxation agreement. Often these issues are a precursor to international trade agreements ie this is a common international framework to which many countries subscribe

For example, Total would carry the market value on its balance sheet at date of TLW sale so that it avoids double taxation later.

'Thoughts on this?'
Complex area.

In the case of Zain International BV they disposed of 100% shareholding in Zain Africa BV to Bharti Airtel International, both resident in the Netherlands. Zain Africa BV, the subject of the disposal, had a 100% shareholding in Celtel Uganda Holdings BV which owned 99.99% of Celtel Uganda Limited. Celtel Uganda Ltd’s shares in Uganda were not transferred, and its property was not disposed of. The transfer of the shares in Zain Africa BV took place in the Netherlands. The Commissioner General of the URA raised a Capital Gains Tax assessment of USD 85 million on Zain International BV on the gain realised from the disposal of shares.

'Unlike related cases like the Vodafone case in India and the Petrotech case in Peru, the Court of Appeal ruled in favour of the URA, saying that the URA had jurisdiction to raise a proper tax assessment against Zain International BV. This issue is currently unresolved and is under the Mutual Agreement procedure (MAP) as prescribed by the Double Tax Treaty.'

So as a matter of precedence, could the URA be argued to have the authority to waive the taxes vs what Waybona claims?...

' at $45 dollars a barrel TLW is doing ok from $35 a barrel break even '
Interesting uganda FID and the subsequent sale of tlw interest works with $60+ over 25 years. A takeover of tlw would use similar values to structure a price for all tlws footprint imo

Thks for the link daltry,
'If you have time this W/e , please hear it through'
Interesting, a political pandemic..
Its up to the post pandemic policy makers to rebuild keeping the best bits of global liberalism and nationalism imo

'With recent stock market presence tightening in US for Chinese capital - they can start looking more into European markets.'
Eurobond money into uganda and we got our deal. Well this week the imf gave kenya [$]1Bn towards cv, so we may see movement around fdi in kenya shortly. Just guessing but money is moving..

'Chinese takeout, or takeaway? :')'
number 100

'What the chances a bid is brewing to take Tullow by Chinese?'
Anyone with experience of corporate strategy and business development will know interested parties have run a ruler over tlw as bau. Think China/ Cnocc strong possibility but other possibilities too. Thin Kenya would need to conclude before a bid unless it was cnocc

'I am pretty confident they weren't in there today for the 100% rise'
I was in Mars and sold on my mobile whilst out walking. If I had been at home I would have picked up all the news and chat etc.. profit is profit but if it opens at 80 on Tuesday, the only thing that will make me feel better is if tlw is £1. Lesson learnt ...again

again today. Brent back at $35..

'This almost feels like the share is being held back for a takeover?'
Dont know about being held back for a takeover. But its a prime target for a takeover. Once kenya out of the way, an oil major could benefit from importing the streamlined financial and operating model to drive out large scale synergies and execute similarly imo

Is each qtr div reduced by 1/3 or are q3 and q4 brought in line with q1 and q2.

Roughly same result, reduction by 1/3

'Better for slow rise to 45/50. Help keep them rock merchants in check for a while'
Think the Uganda sale caught them all off guard and starting to believe. Serious investors building stakes imo.
They cant wait too long though. Moodys reviewing the credit rating next month and TLW has ticked the boxes with the Uganda sale. With the certainty of hedges and breakeven fcf $35 oil, Q2 reporting will be +ve. In the meantime Kenya sale can land any time. New CEO will bring opportunities and relationships to the portfolio that haven't even been discussed. All building to a higher SP.