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It was indicated that there were a number of interested parties and TLW would be examining offers in June. There was no timetable. Given the new CEO doesn't start until July I don't expect any significant news before then. From a PR point of view they'll want him to be able to give lots of positive news, "new face, out with the old, fresh start etc".
Nice summary Slift. TLW is a momentum share and there is a lack of interest here atm, but it won't take much for it to build a head a steam, especially if PI's are looking to reinvested profits made elsewhere. It is frustrating. I made a personal call that TLW would track the POO upwards, but it stagnated. Based on experience when a SP tracks in the way that it has for the last month it tends to reveal off book action from those with deep pockets. Now that could be shorters reducing or others offloading only time will tell. I think we'll have to wait until July onwards for any real action. They'll want to give the new CEO lots of positive news flow to demonstrate closure on the recent s*itshow and a new narrative of a fresh approach/bright future etc. The current market is nuts. You only have to look at French Connection today. A prime candidate to go bust, but up 35% for no particular reason since mid morning. Same as TUI, was that worth a 60% rerate in a couple of days?
Because it takes time it unwind positions. Those with financial power will want to deal in slow and controlled conditions. TLW is being held in an ever tighter range at around 25p. Shorters will require stock and the lender will want to offload, but they certainly won't want violent price movements either way as they conduct their business. I suspect it'll continue like this for a while. If TLW does move it'll be for no obvious reason when you least expect it.
Balance will come quicker than most people expect. The Times reported yesterday that demand destruction had potentially been miscalculated for April and could have been closer to 13m than 29m. It's all smoke and mirrors. There will be heavy cuts and the economy will emerge from lockdown over May and June. This will provide balance. There is a lot of spare oil about, but maxed out storage is not going to happen as the slack will be taken up as people move again. It wouldn't surprise me to see POO up to $45 by July. If that's the case most oil stocks will double. All the press are now pushing a positive message, again the Times ran a piece suggesting that this was the time to get back in to stocks generally. It may dip around May 22nd with the WTI contracts farce, but overall you only have to use your own experience to see that there is far more traffic on the road compared to the start of April.
That's the million dollar question! I've made two duff trades in the last 10 days being completely wrong footed by the market, Yesterday was a classic example. I woke up at 6am to see Brent at $19 having dropped to $16 overnight given the metrics you'd assume yesterday would have been down, but no! Nobody knows from day to day what can happen (Trump has only to open his mouth for example). I would suggest that if you are confident this will rise in the next 4-6 weeks trying to get a lower price for a few pence will make little difference as you will see a rise to 40p+ if Brent maintains $30+, but it could well dip before then. Objectively after 1st May there will be cuts, not enough initially, but cuts nonetheless. At the same time over May and June more Lockdowns will be removed and commerce will start again. In theory this means that the rise in demand, albeit slow to start with, coupled with cuts should begin to balance the market. The market will be forced to balance because of lack of storage. It will be rough and I suspect that there are violent down days and big up days to come, but if you try to second guess by trading you will lose money. At this point if you sense the market is going to drop significantly stay out and aim for a better price or if you think it will rise buy and hold through the inevitable turmoil for 4-6 weeks and reassess then. Above all else do not buy shares based upon advice or feelings expressed on these boards. All have an agenda rampers are in and want the price to rise or are selling and de-rampers are normally in cash and want to buy at a lower amount. Ultimately the world consumes vast amounts of crude and there is currently no mass alternative, so it is still valuable. Most politicians are beginning to see that they will have to ease lockdowns, because if they don't the economic damage will be permanent and there will be civil unrest as people tire of them. It's a sh*tshow casino, but fortunes can be made at these levels, you only have to look back in history.
Yes, this situation existed after the price drop in 2014/15 and masses of oil floated around in storage to the point hiring a tanker was almost impossible. China are buying up vast amounts of oil at this price. They'll store it wherever they can, as despite the doom, POO will rise in the future and they'll insulate themselves to a degree. There is a school of thought that if shale is crushed then the POO may rise to over $100 a few years from now when the supply/demand equation reverses. If you look at the historical chart this is what tends to happen after a supply shock (*although past performance and all that....).
Yes, another way of looking at it is a bookie taking a bet. The fund bets that oil will be above $64 and therefore they will collect and PMO guarantees a fixed income and insures against market volatility, sadly they didn't have the foresight to hedge 100% (although no oil company would ever do that). It will be very interesting over the summer to see the value of the fresh hedges that are put in place.
The politics of oil are screwed up. I'm reading Black Wave, by Kim Ghattas at the moment. It charts the history of the rivalry between Saudi Arabia and Iran since the oil crisis of the 1970's. In short ideology trumps rational decisions. You only have to look at the characters MBS, Putin, Trump and the Iranians....they don't care how much damage they cause because their wealth insulates them. It then becomes a giant dick waving competition.
Nobody is physically paying for it. PMO are selling it at the market rate $30 and then the difference is made up to them by the Hedge company/fund. A better way to describe it is insurance. If the price had risen then PMO would have taken $64 and the Hedge would have taken any money over it in profit. It must be incredibly painful for any Hedge at the moment.
PMO will survive. The question is in what form. If this drags on few companies will survive. PMO has great prospects, but high debt. If this goes on for a year or more it'll need cash, that'll either come from shareholders or takeover. Either way it'll get diluted (but that is a worst case). The Russian game is to play "last man standing". Those that remain after this will be laughing, because this will crush investment and despite the record lows I can see record highs 2-5 years down the road. Shale wiped out, no investment so no new projects, excess stored oil used up and bingo supply shock to the upside. Alternatively the US may get the Saudi's on side and break OPEC. It is economic war.
Any Judgement must be formally "handed down" at Court. That is to say she will read it out into the Court record before the parties. We do not live in ordinary times, so it may be the Court is prepared to do this via video link. She cannot simply "publish" her findings.
Ordinarily you can check the daily Court lists of cases in the next day, but the last Court of Session list was on the 25th March which states all non-essential work has been cancelled for the next three weeks.
The rate of decline in consumption is staggering. Even if they had agreed a 2.7m reduction, that would have barely scratched the surface. There will be economic disruption on a scale not seen before. It is not hyperbole to expect GDP to reduce by 30-50% over March, April and May. There will be opportunities to make money, but on time limited trading. Russia, Saudi and the US cannot cope with prices this low or lower. All the boasts of an ability to suffer low prices are nonsense. Both Russia and Said need an exit that saves face for both. MBS and Putin are dictators with thin skins and egos. Neither wants to be seen as weak. Both can control dissent for a period of time using their state security services, but not indefinitely. It was no coincidence that MBS arrested members of his family perceived to be a threat to him after the OPEC meeting. Throw into the mix Trump and it's hard to see how this international c*ck waving is going to end. My gut feeling it that all with struggle to raise output, but will maintain they are. This will last until June when there will be the next OPEC meeting when substantial cuts will be made. This can be spun by all sides as a win for them. Any cut will offer a temporary lift in price, but until there is meaningful demand I cannot see oil above $35. The million dollar question is what effect a successful Alaska drill will have and/or the out come of the Court case. It's always an unpredictable ride with this share.
No. It means the Judge has reserved judgement. This is perfectly normal after a legal argument, because she will hand the judgement down in writing at a later date.
You've got two notoriously thin skinned governments and leaders. I think Russia did think the Saudi's would roll over, but MBS is petulant. They just went, "Hey I'll raise you and burn my house down as well". How you get them back to the table so that they both save face I don't know. The Russians are in a much better position, because their citizens have no hope and have suffered hardship for years. The Saudi's on the other hand are in a vulnerable position because the need cash to keep the wider family happy. If they're not happy it sows the seeds for a coup. It's obvious that's why MBS moved to take out threats to him on the weekend. I'm concerned now that we've entered some kind of death vortex where any good news is just crushed by hysteria. I suspect they'll keep this up until June and then a "face saving" meeting will be arranged whereby they'll cut and the POO will serge. Alternatively the mob might be eating the weak and sh*tting in their own hands by then.
ARCM will smell blood in the water. They'll be greedy and want this at low as possible now, irrespective of the deal this is a black swan event that has gifted them not only a get out of jail free card, but an opportunity to make a stack of cash because of market panic. Personally OPEC and the Russians will be sh*ting themselves. They'll know the exact figures they are exporting to China and I suspect the true picture is grim. A cut over over 3m (including the December cut) is likely to ensure the market is balanced.
The one silver lining is the OPEC meeting. They want the price to be around $60, so there will be a cut to support that price level. At the very least it should arrest the fall in SP. This is like 2008 all over again. Hold or keep cash ready to invest when it turns. There'll be some spectacular returns over the next 24-36 months.
OPEC will cut. They've already said as much at the start of Feb when a figure of 2.7m barrels was mooted. They will look to cut the reduction in demand from China. This sets up an interesting scenario, because if demand picks up over the summer then the price per barrel could spike. Given social media and society in general the world is now a hysterical place and this is reflected in the market. You'd be forgiven for thinking we were facing airborne ebola rather than a nasty respiratory illness that has a slighty higher death rate than flu. The psychological problem is that when people hear that 1, 2 or 700 people have died they can easily conceptualise the figure, because they can imagine 700 people and get scared. 1.5 billion people live in China and 7 billion around the world. In this context the figures are tiny, but it is impossible for people to image 1 billion people in the same place.
It is no doubt going to drag on the world economy, but the trump card here (no pun intended) is OPEC. Thereafter there is PMO's own news stream of Mexico, Alaska and debt reduction. This will pass and when it does the price will rise accordingly. I suspect ACRM can't believe their luck. If I was them I'd be using this window as an opportunity to close. It's a win, win for them.
ARCM are not shareholders. Do not mistake the CFD's for stockholding. Their apparent, although paraphrasing Rumsfeld this is based on known knowns, aim is to drive the price down via a placing to pay down debt. TD and Rose are not playing ball, as they are looking to grow the company and importantly make use of the UK tax position. This is good business. ARCM are looking to make as much money in a short a time frame as possible. The RI for growth won't have a huge impact on price, as the enlarged company will still be worth the same pro-rata. A RI that grows a company is always better than a RI for debt payment, hence why ARCM object to it.