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By the way , the paid for research of a certain oil analyst predicting production of only 80kbpd gross for Jubilee , which was all part of a bear raid last week , is not now exposed as very misleading by the latest guidance.

Supercooper . The difference in the past of course is that there was no revenue associated with that gas so it would have been misleading to include in production …now Tullow has an interim sales agreement and is expected to sign a longer term GSA. It appears to me there is a lot of horse trading going on with the Ghanaians right now and Tullow are quite rightly not investing in Ten until the government changes its fiscal terms. This was highlighted by a recent Reuters article where it was revealed a new royalty regime incentivising exploration offshore was going to be introduced. Watch this space !

@Supercooper. Hang on a second…the new wells in Jubilee are coming on stream a bit late by my calculations…five of them . Some production will help replace a natural decline rate in the field but the others will boost production. If they were worried they would have drilled more wouldn’t they …but they are releasing the rig. Kosmos have already said that the current drilling programme should leave them in a position where they have spare capacity (for precise words listen to last Kosmos quarterly conference call)…to meet production needs. It will help if Tullow gave us more information about when these new wells are added. Our run rates could look very attractive at the next quarterly. Also remember this is production as it exists now. It does not include a revised FDP on Ten, it does not include Kenya ..and it does not include deals elsewhere. It now appears from recent trade publications that Tullow was an under bidder on a major package of assets being sold by Shell ….so these static assumptions about just existing production are unlikely to be correct.

Remember producing over $600m of cash flow in the next two years is more of less the market cap. Even if you include the debt in the EV we are almost double ? The cash flow yield of many larger E&Ps.

@BleepyBoo

If you had been keeping up with the trade press and recent deals you would know that was an incorrect statement . Tullow is focussing on producing assets rather than exploration, it has plenty of assets to exploit of its own as well as market opportunities but as it pays down debt it can also start to add to its portfolio or redistribute to shareholders.

@JMAX There is money to be made range trading …but the fundamentals of Tullow have strengthened considerably over the last few years . An interesting online article in Oil Price ,highlights lower cash flows for the E&P sector in the 4Q of 23 and how it has affected the share prices of many decent upstream plays like Devon Energy. Tullow of course had extensive hedging forced on it by the banks on a previous bond refinancing. so realised prices last year were no different (more or less) to where they are now. Tullow had major cash outflow over the last few years on capital costs for decommissioning rigs in the North Sea and in previous African licences but most importantly to allow Jubilee SE to start production. The great news is that is now history and the Company should produce massive cash flows over the years ahead unless the oil price sinks spectacularly. There was a problem with two gas injectors in the second half , which assist with field pressurisation..a standard maintenance issue which normally takes a few months to repair . The analyst speculating about the water cut should know that this affects primarily the periphery of the field as it inevitably matures in depleted areas and that water injection rates are likely to rise with increasing oil production because that is normal reservoir engineering management. I think they are a little out of their depth. If you refer to a November 2023 article in one of the oil industries professional publications you will see that recent drilling in Jubilee has resulted in additional reserve potential not less. The analyst was right about last years production which was signalled to the market in the last trading statement so that was hardly insightful. I believe he is totally wrong about this years…we will find out tomorrow if it is you or me, which is on point . By not giving clear forward Tullow has allowed cretinous shorters to bear raid again. To suggest Jubilee production is going to be 80kbpd is light of recent guidance from Kosmos and Tullow is pretty outrageous. I note two of the largest shorters are buying back stock in the latest disclosures.

Those numbers reflects the break down of two gas injectors on the main field which probably needed spare parts before repairing ? Standard industry problem with a few months disruption ? Should be on line by now plus all three new wells coming on stream for Jubilee SE as well at start of the year. People panicking as usual for all the wrong reasons.

“Occidental’s CEO Sees Oil Supply Crunch from 2025” I see you’re not up to date with the headline at the Oil Price website.

JMAX we are on a journey ..there will be good days and bad days in the market but I feel confident that I know the direction of travel in this share. You are ignoring the fact that the need to deleverage is almost over and that supplemental cash flows can be reinvested in the business or paid out in dividends.

Did I really just buy some at 31.2 pence ? Holy moly ! What a gift.

@gogadget I am sure every African leader would love to have their own refineries but it would be wise to treat press articles with healthy cynicism . Private investors must remember that many publications are used to spin and influence with the truth being the loser. I look forward to the day when Tullow starts to buy in its own stock and we can say goodbye to some of the clowns on these threads. The Company exposed to the uncertainties of the oil price and has significant debt but the cash generation moving forward is immense. Kenya could be a winner…but politicians need to stop posturing.

@Stupmy Please enlighten us what the tea leaves say ? I know that charting can be a self fulfilling prophesy but I am always curious about the “logic” involved in drawing lines on charts .

@antonvb If you want to believe what’s in African Intelligence dream on. I would be amazed if a new refinery project has a chance located in Africa. Uganda has spent 5 years for a 60,000 bpd refinery but has no takers and the Chinese got their fingers burnt big time in NIger…

There are substantial reserves in Kenya. Tullow has proven them up in several locations but to get top price for their assets further reservoir data on long term production will be required in the other fields. A pragmatic approach to short term production needs to be taken by the Ruto government. In light of current economic woes I think Tullow should be confident of making progress on the project …as they have already shown that small scale trucking can be profitable. Now Rahul has finessed 100% of the project for nothing ,he is in a position to negotiate freely and I am very hopeful .

JMAX. Impairment is irrelevant to cash flow yield. You are way out of your depth. Western banks may have withdrawn from reserve based lending but I am sure you understand that others are now offering alternative credit facilities, as reflected in Rahul’s speech at Africa Oil Week. Tullow has got ahead of the curve on its debt repayments. Jeffries view only has validity in relation to the delayed FDP for TEN..and the divestment of high return non operated assets. Tullows growth projects in Kenya and Ghana may change the mix but the shares should have benefited more IMO from the deleveraging of the balance sheet. The current undervaluation is a joke. Post a deal of the bonds, which looks more a formality after the tender offer…the equities should be able to receive distributions . Jefferies appear to me to be always playing catch up…whether that is naivety, genuine cynicism because of past failures or extreme prudence I have not been able to discern.

So, isn’t this the analyst , who admitted on a recent conference call, that most analysts following Tullow were $400m overprovisioned for capex for the 2 financial years to Dec 24 ? Admittedly, the projects in Kenya and the Ten FDP have not yet finalised, but neither has the incremental cash flow associated with these projects. Unless, you are a complete clown you will appreciate that moving a share price recommendation by 7p to 27p when the equity represents a stub portion of total enterprise value is a bit pointless. If their point is that oil prices might be 10% lower ? than previously forecast for the sector, he also needs to rethink the likely refinancing cost of the debt , in a falling interest rate environment. I believe Mark Jeffries questioned the ability of Tullow to plateau production above 100bpd gross for Jubilee. When several wells come on stream in the current quarter I look forward to seeing him eat his words. In fact, Kosmos has specifically guided the market that additional production capacity would be drilled ahead of requirements to ensure production levels at or above the 100kbopd.

According to J Kemp at Reuters , oil traders postions have fallen by almost 57% since mid September…standing at only 295m barrels …and that was just to the first week of December ! This is one of the lowest levels in 10 years i believe. Combine that with the selling on the SPR during the course of the year….prices have held up pretty well. With a cash operating cost of $11 per barrel in Ghana plus a not insignificant borrowing costs , Tullow is not exactly imperilled at current levels. As interest rates fall , the balance of fear and greed may reverse as it usually does. Meanwhile Tullow has a short term hedging programme which will iron out most extreme volatility in prices . Lower prices mean the short term US shale flex producers and marginal asset plays will start to wind down rig counts or low producing wells ….and the cycle continues .

@Power How can it be eco friendly , let alone advisable from a national security point of view , to rely on imported hydrocarbons ? Much better to reduce your carbon footprint by producing from local production and benefit impoverished communities in Turkana with employment and tax revenues . Your argument is futile. There is a large , well appraised resource available now for which carbon offsets could be purchased. It is worth billions and Tullow is perfectly sensible to want to exploit it.

@StanleyPro

No offence, but there is no point comparing old quoted production forecasts which do not reflect the recent sale of production assets such as those in Equitorial Guinea 6kbpd to Panora , 1.5kbpd North Sea , Norway etc etc. For example , I you gave Rahul US$1bn of debt facilty , I am sure he could ramp production up materially…but that would be imprudent which is why the Company is shrinking the balance sheet whilst trying to maintain production. Just sayin…

@StanleyPro and @Power

The tender offers for debt repayment …and the low percentage take up is the “proof” that the investment community accepts substantial progress has been made. Supermajors Chevron and Exxon are apparently looking for production assets and considering opportunities in West Africa again and the technical risks in starting up a satellite field at Jubilee are now behind us. Provided the Company has a reasonably sensible hedging programme the shorters are at risk of being crushed . I do not expect a wall of punters buying in to the stock but, IMO, there is bound to be a corporate buyer out there with a stronger balance sheet who will exploit the absurd valuation.

The shares will reprice post refinancing of the debt maturities and any onerous covenants which limit share buybacks and/or dividends . If Rahul is not sympathetic to shareholder returns we will have to remove him…plain and simple. Always a potential risk as their is a slight conflict of interest with Directors incentivised by options (which only qualify for dividends post exercise). The largest shareholders will obviously have a major bearing on what form shareholders distribution takes.

Antonvb I suppose if you were trying to buy back $400m + of bonds you would not want to shout too loudly from the houses about reserves and next years production. Make your statutory declaration of facts and then buy them back as cheaply as possible. When you listen to Kosmos talk about Jubilee wells in the first half of 2024 taking us to above existing nameplate capacity …just ask yourself with the cost of capital so high why you would not seek to raise that nameplate capacity to 140kbpd ? as indicated was possible some time ago by Paul McDade….

@POWER Cash is king… and Tullow will be generating bucket loads of it. Wait for the new wells to come on stream in JANUARY and see what happens to production and let’s see what the annual reserve report has to say ! Refinancing the debt on sensible terms in a horrendous woke debt syndication market is starting to look straightforward . The risk is the oil price at a time of economic uncertainty…so long as the Company is prudent with its short term hedging and takes out puts and calls to negate the impact of any significant fall , in my opinion the share price has only one way to go in the medium term. In the short term Kenya or a FDP approval for Ten could also result in a rerating .