Member Info for MarcelKrell

The the question is: how long will it take for SA/Russia to have 'shale' convincingly knocked out... so this fight will end?
Because with shale 'gone' SA and Russia want oil prices to rise again.

Yes, Ok. 60% of 2020 sales revenue hedged with a floor of $57/bbl; 40% of 2021 sales revenue hedged with a floor of $53/bbl
But if they reduce the debt by $1 billion, as dorothy says, it's another situation. And maybe some increased production from Ghana... and: these low oil prices are gone end of year.

Corona will be gone end of year, and the SA / Putin fight also.

And any additional successful exploratory results would bring this puppy back to life again.

Does it really matter where oil bottoms now? Only if we want to see a TLW bottom when buying. Thank God TLW is hedged, and the lower oil is, the less long it will stay there.

I also don't rule out that (extreme) pressure on SA will increase to end this game during the current Corona situation.

But I do think that thanks to Corona oil prices will stay low longer than it would have been otherwise. Unless Corona will peek over the coming period and/or the find of a vaccin.

And Tullow is of course very good hedged against the oil price for way into 2021, and regarding the debt...

https://twitter.com/TullowOilplc/status/1238001976513900544/photo/1

One would say/conclude: 'this one is in the pocket...' right?

James, regarding: "12-18 months, if Tullow doesnt drill in that time they are bust"
As far as I know TLW has a solid producing portfolio, and with the current steps they take, I don't think they need to rely on exploratory drilling. That is thanks to all the measures they now take and have taken. Not that new portfolio items wouldn't help... but the aim is that they need to be mean, lean and strong for the future.

https://edge.media-server.com/mmc/p/m7m6tsat

What an excellent conclusion:

"Tullow Oil is embarking on some serious cost cutting measures in a desperate battle to survive, closing all bar its London office and cutting staff by 35%. It has hinted that it can raise further money by selling some of the assets in its portfolio. While management are light on the details here, oil industry commentators reckon this could be fields in East Africa, which are not producing the bulk of its oil. Tullow did confirm that it would like to sell some of its blocks in Kenya.
While oil prices are very low and could go lower still, Tullow Oil says it will still be conducting further exploration, especially in West Africa. It reckons it can add a further 15,000 barrels per day if its gets its Jubilee South East field in Ghana up and running, for example. There is even fighting talk of drilling a well in Suriname and further exploration in Argentina. This could enhance the value of the company’s assets should a buyer emerge. It is certainly looking cheap enough for a bigger acquirer.
A lot of the FTSE 250 oil stocks are seeing some heavy selling at the moment (e.g. Premier Oil), so most recent price action is less to do with Tullow and more with Saudi Arabia’s plan to re-assert control over the oil market. Tullow does not look like it is out of the fight yet and if it digs in, as it seems to be doing, could yet come through this. But it does need to offload some of those East African assets, and fast, if it is still going to be around next year."

I could not agree more.

https://www.thearmchairtrader.com/is-it-time-to-say-goodbye-to-tullow-oil-lsetlw/

An absolute must read imo:

"ullow Oil is embarking on some serious cost cutting measures in a desperate battle to survive, closing all bar its London office and cutting staff by 35%. It has hinted that it can raise further money by selling some of the assets in its portfolio. While management are light on the details here, oil industry commentators reckon this could be fields in East Africa, which are not producing the bulk of its oil. Tullow did confirm that it would like to sell some of its blocks in Kenya.
While oil prices are very low and could go lower still, Tullow Oil says it will still be conducting further exploration, especially in West Africa. It reckons it can add a further 15,000 barrels per day if its gets its Jubilee South East field in Ghana up and running, for example. There is even fighting talk of drilling a well in Suriname and further exploration in Argentina. This could enhance the value of the company’s assets should a buyer emerge. It is certainly looking cheap enough for a bigger acquirer.
A lot of the FTSE 250 oil stocks are seeing some heavy selling at the moment (e.g. Premier Oil), so most recent price action is less to do with Tullow and more with Saudi Arabia’s plan to re-assert control over the oil market. Tullow does not look like it is out of the fight yet and if it digs in, as it seems to be doing, could yet come through this. But it does need to offload some of those East African assets, and fast, if it is still going to be around next year."

I could not agree more with this assessment of the current situation.

https://www.thearmchairtrader.com/is-it-time-to-say-goodbye-to-tullow-oil-lsetlw/

Shpunken: The CEO will take a few weeks max? And Dorothy has Twittered: https://twitter.com/TullowOilplc/status/1238001976513900544/photo/1

It's called 'emotions' I think. And short term memories.

But that is how one can make money in the stockmarket, I assume? Counter-emotions.

Its challenges have not deterred all investors. Last week JPMorgan Asset Management disclosed it had built a stake of more than 5 per cent in the company, according to regulatory filings. Tullow declined to comment on the stake.

https://www.ft.com/content/5da86a66-654b-11ea-b3f3-fe4680ea68b5

Nice resume: “They’re pretty well-hedged for the short term. They can weather price falls easily,” said David Round, an analyst at BMO Capital Markets. But he added: “The question is how long this goes [on] for.”

Tullow is hedged for a pretty long time I would say.

Betrayed, regarding:

"Rock, thats only using Oil demands, as mentioned this is a double whammy with Corona, world economies will take many months to recover, many businesses have gone buts."

But markets are forward looking, so share prices will rise way ahead of actual recoveries.

They’ve Contained the Coronavirus. Here’s How.

Singapore, Taiwan and Hong Kong have brought outbreaks under control — and without resorting to China’s draconian measures.

https://www.nytimes.com/2020/03/13/opinion/coronavirus-best-response.html

Why would it take the rest of the world more than a year? Doom thinking these days imo.

From today:

"It'll come as no surprise then, to learn that analysts have cut their price target 15% to US$0.83. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Tullow Oil at US$2.41 per share, while the most bearish prices it at US$0.13. With such a wide range in price targets, analysts are almost certainly baking in outcomes as diverse as total success and probable failure in the underlying business. With this in mind, we wouldn't assign too much meaning to the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business."

*Trading at 90.1% below its fair value
*Earnings are forecast to grow 82.87% per year

https://finance.yahoo.com/news/analysts-lowered-expectations-tullow-oil-054837137.html

An example of some BS:

https://citywire.co.uk/funds-insider/news/the-expert-view-tullow-oil-savills-and-brooks-macdonald/a1334515?ref=citywire-money-latest-news-list#i=2

" ‘Like many oil groups the damage the current oil downturn does will depend entirely on how long it lasts. The group’s well hedged for the next year or so but after that it needs $45 oil to break even. With Brent currently trading around $34 a barrel that will look a long way off.’ "

This expert seems to suggest that $34 is here to stay…? OMG.

A negative 'hype' from 2016:

"Economists at the Royal Bank of Scotland say that oil could fall to $16, while Standard Chartered predicts that prices could hit just $10 a barrel."

https://www.bbc.com/news/business-35245133

How low will it go?
Crude oil prices fell into what seemed like a bottomless pit in early 2016, with analysts trying to one-up each other with bold calls on where crude would bottom. Several analysts put out abysmal oil price targets in late 2015 and early 2016 warning that crude could drop to $20 per barrel or even as low as $10 per barrel. Each made a bone-chilling case for why crude could continue crashing with no end in sight.
It turned out that most of these fear-driven calls were wrong, though crude did bottom out in the mid-$20s by early February...

In order to fight Corona effectively, worldwide, drastic measures have to be taken during a relatively short period... China, Hongkong & Singapore are proof of that it seems.

What Happened to Oil Prices in 2016?
Oil prices are notoriously volatile, and their actions in 2016 were no exception. Prices plunged to start the year as supplies piled up in storage due to resilient shale production and rising output from OPEC. Speaking of which, OPEC spent most of the year arguing within itself, instead of working together to fix a problem that had grown worse due to its decision to battle shale producers for market share. That said, as the old oilfield mantra goes, "The cure for low oil prices is low oil prices," which has certainly been the case this year. Here's a look back at the rapidly evolving oil market of 2016.

https://www.fool.com/investing/2016/12/17/what-happened-to-oil-prices-in-2016.aspx

And these days the Russians will try, helped by Corona related low demand.

In 2016 the year low oil price was $26.21 and the year close $53.72

Rising efficiency gains in U.S. shale oil
Booming U.S. shale oil production played a significant role in the oil price plunge from mid-2014 to early 2016. Efficiency gains in the sector lowered break-even prices considerably, making U.S. shale oil the de facto marginal cost producer on the international oil market.

https://blogs.worldbank.org/developmenttalk/what-triggered-oil-price-plunge-2014-2016-and-why-it-failed-deliver-economic-impetus-eight-charts

https://www.cnbc.com/2020/03/09/russia-saudi-arabia-squabble-over-oil-strategy-but-the-real-battle-is-with-the-us.html

Russia’s failure to buy into Saudi Arabia’s efforts to deepen cuts ended a production agreement, and now the two nations seem to be locked in a damaging market share war.

Analysts, however, say the real target, particularly of Russia, is more likely the U.S. shale industry.

The market-share battle could result in a further 10% or more decline in oil prices.

Analysts expect the price war to result in a hit to the U.S. economy and a smaller U.S. oil sector.

"Tlw won’t last at these prices, no chance, let the bidding war begin"

Eh... almost NOBODY will last at these prices… Not even S.A. and Russia certainly not. Shale is the target. And Tullow is hedged mostly. So I don't see any scenario in which TLW cannot survive during the coming year.