The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
The bigger picture here is that while this dip is no good for Tullow's revenue, between the higher average price in Jan and hedged production the impact is likely not as bad as we might fear. On the flip side, unconventional plays in the US will be only more likely to fall into bankruptcy sooner and hasten the focus away from shale and into offshore.
Market seems oblivious that Libya production is a small fraction of its usual level with no sign of it coming back any time soon and the situation in Venezuela is only going to get worse with the US now looking to sanction any oil companies helping PDSA.
Rumour is that the JTC to recommend output cut of 600K, but remember this is technical advice to OPEC+ from the experts and doesn't represent the final political outcome, which may be a margin one way or the other, especially if Saudi once again adds more weight.
I am not sure the gaps even been wide enough to trade profitably to be honest. This is just getting messed about by thousands of small, auto trades and with no CEO news likely until at least mid-March that isn't going to change without some unexpected news of such significance that the rise sticks.
Streamlining the workforce is not desperate, it is entirely sensible. McDade appears to have created a culture of bloat and hubris, so it is time for a rude awaking, less work from home and more hands to the pump sorting out the issues that got the company into this mess. McDade must have his head stuck in the sand fantasizing about Tullow becoming a large major wheel, neglecting the day to day, unnecessarily retaining oversized stakes in their exploration projects, insisting on operatorship and spreading exploration budgets too thin. Tullow has become another example as why crowning "one of the boys" as new CEO is never a good idea.
Although pretty much what we were expecting already, having to wait until after March 12 for an announcement on the new CEO, feels no less frustrating as it just seems that without that vital step on the road to recovery Tullow remains in limbo. The more positive read on it is she is suggesting we will know who the new CEO is during March. They must have a good idea by now, but not surprised that person would want to see the full results of the internal review before committing.
InJamesweTrust - I very much agree with your assessment that our largest shareholder is a deterrent to a lousy bid and for that I a feel very grateful to him. I don't see any reason why the board would feel compelled to accept anything less than 140-150p but there is always doubt when there is so much uncertainty that you worry the board has lost its morale altogether.
The company is adrift with no proper captain, but rather a former CEO who is doubtless very invested in protecting her reputation at the Bank of England for careful management of risk. But what Tullow really needs now are some bold and decisive moves, quite probably some deal making and definitely some frank discussions with the government of Ghana.
A takeover is not a desired outcome at this juncture, we want a recovery be firmly in place first so that any deal can be done from a position of strength. Any approach coming soon based on recent SP action would most likely be derisory at best, you can forget dreams of £1+ more like 65-70p.