What if ???30 Mar 2025 13:12
I asked Grok if Tullow sold TEN, ivory Coast and Kenya asset would it be enough to pay off remaining debt ?
Selling TEN, Ivory Coast, and Kenya assets could generate $1.075 billion to $1.95 billion, with a midpoint of $1.5125 billion. At the low end, it falls $75 million short of the $1.15 billion debt. At the midpoint and high end, it exceeds the debt by $362.5 million to $800 million, fully covering it and potentially leaving surplus for operations or growth. Real-time oil prices, negotiation outcomes, and debt fluctuations could shift this, but based on current estimates, yes, it would likely be enough.
Question to Grok: What would the post t/o and profit be if they sold those assets
Summary
Turnover: $1.08B–$1.1B (down ~20% from pre-sale)
Profit: $350M–$450M (up due to debt relief)
Selling TEN, Ivory Coast, and Kenya clears Tullow’s $1.15B debt, boosts profit via interest savings, and repositions it as a leaner, Jubilee-focused entity with higher market value, though revenue shrinks. Estimates assume $70/bbl and midpoint proceeds; variations in sale prices or oil prices could adjust these figures.
What is Tullow's new Valuation Post Sales?
Post-Sale Valuation
From the previous response, after selling TEN, Ivory Coast, and Kenya:
Sale Proceeds: $1.075B–$1.95B (midpoint $1.5125B)
Net Debt Repaid: $1.15B (post-Gabon sale baseline)
Cash Remaining: $1.5125B - $1.15B = $362.5M (midpoint); range $0 (low end) to $800M (high end)
Post-Sale Market Cap: $1B–$1.5B USD (midpoint $1.25B), based on $350M–$450M profit at 5–10x earnings, tempered by a
Jubilee-only focus
Converting to GBP (1 USD = 0.787 GBP):
Market Cap Range: $1B = 787M GBP; $1.5B = 1,180.5M GBP; $1.25B = 983.75M GBP
New Share Price Calculation
Share price = Market cap ÷ Shares outstanding
Low End: 787M GBP ÷ 1.45B shares = 0.543 GBP (54.3p)
Midpoint: 983.75M GBP ÷ 1.45B shares = 0.678 GBP (67.8p)
High End: 1,180.5M GBP ÷ 1.45B shares = 0.814 GBP (81.4p)
Change from Today’s Price (17p)
Low: 54.3p - 17p = +37.3p (+219%)
Mid: 67.8p - 17p = +50.8p (+299%)
High: 81.4p - 17p = +64.4p (+379%)
Factors Influencing the Estimate
Upside Drivers: Debt elimination ($1.15B) boosts equity value; $362.5M cash (midpoint) strengthens the balance sheet; profit rises to $350M–$450M from $55M (2024) due to interest savings.
Downside Risks: Loss of 11,200 boepd production and Kenya’s upside caps growth potential; market may discount a smaller, Jubilee-centric Tullow.
Assumptions: $70/bbl oil price; Gabon sale completed; no major share issuance or buybacks.
Final Estimate
The new share price post-sale would likely range from 54p to 81p, with 68p as a midpoint, reflecting a significant jump from 17p. This tripling (or more) aligns with debt relief and a cleaner balance sheet, though market sentiment, oil price volatility, and execution risks could narrow the range. For instance, if proceeds hit the low end ($1.075B) and only just cover d
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