Member Info for Showsnowman

LOL indeed! Needlessly selling all these assets, anyone would think we were in deep discussions with lenders and potentially in breach of covenants etc? Oh wait..........we were/ still are! And what on earth happened to Rahals crystal ball when just 6 months ago the world was predicting oil at $40 - $45 for 2021? Take it back Rahul, get yourself a new one..... PMSL!

Exactly seakingalpha. Spot on.

Put your glasses on Slift.....I said if “lenders” support Rahul’s strategy
Which is the only priority in town right now.

Ignorance doesn’t come into it. ITS A FACT - 6-8 Kbpd can be made up easily in Ghana if Tullows lenders decide to support Rahul’s strategy.

I don’t need to. I think most on here will trust Rahul’s decisions whilst he’s right in the middle of discussions with lenders.. 6-8 Kbpd can be made up easily in Ghana, but only if the company can get there, by satisfy its lenders of course, which is clearly what they are doing. All your negative chat won’t change any of that.

More selective calculations I see. How about the future decommissioning liabilities they avoid & the fact they can redeploy the capex in their higher margin core assets in Ghana.

I couldn’t agree more Stephen. He’s the reason I held the my faith. Not many CEO’s have both an operational track record and such experience in corporate finance.

Chinese imports up 18% (in January compared to December), looks like a possible reason.

Did anyone ascertain if Odeys fund was involved in any way the the bonds?

CMD presented a robust plan / Rahul said all remains on track
SGA (what he calls “Self help” cost reduction (£125m per year)
The ongoing refinancing discussions more about Matching maturity profiles to cash flow - from the various capex commitments. On track to resolve by Q2.
Restructuring of bonds - as expected no details on Specifics as they are price sensitive.
Rahul quoted - “We will be able to repay the debt”. It’s just about understanding cash flow / timing.
And “Company has a clear path to achieving its goals”
Rahul Wouldn’t be drawn on oil price movements, just mentioned that The $55 dollar oil price May be looking conservative. Les confirmed prices already above their base case.

Final comment on Kenya: 2021 work with partners to make it viable.
Rahul feels project is viable even at low oil prices but it will need capital (mention possible partner)
“If we make it work at $40, felt a partner will come.

Mearsk rig booked for Ghana will start in q2
Hope to drill x4 wells in 2021
1 gas injector in ten
X 3 planned in jubilee - 2 wells have a partial impact on production in 2021, but all contribute in 2022 minimally.
Plans to Drill 5 wells in 2022 (more jubilee biased) - getting production to be back to more like 2020 levels.
Clear path to grow production in line with CMD
300m additional capex to deploy -so 2nd rig very possible, but not yet at that stage.
Now Injecting 2000k barrels of water per day.
Consistent gas off take 125m per day.
One question answered on Ghanaian gas - Tullow committed to govt support and in discussion with them on new arrangement, proposal to supply the most compelling & reliable gas deal they have.

2021 Production guidance simply reflected under investment + shutdown (Sept 21) of Jubilee

No tax on disposal. Purchaser equity raise has been successful.
Value accretive & enhances balance sheet.
Avoid future decommissioning liabilities & can Redeploy the capex in high margin core assets in Ghana.
300 Capex million reduction over 10 years.

Odey may well be involved with the bonds, if so, then possibly taking a short position as their hedge, as most hedge funds do.

Was very positive. No nasty surprises whatsoever. RBL delay was planned to incorporate the non-op disposal, further operating update was positive. Discussions now just trying to match cash flow from operational improvements to maturities, but the end goal very clear. I Will try and post a summary later.

If you are interested to read a genuine well written article on the oil sector: take a look at the Dow Jones News Wires by Joe Wallace (he also writes for the Wall Street Journal). He talks about the Brent Crude futures markets, the depletion of stockpile and backwardation (the premium being paid now for front- month futures). Also another one (but I forget the author) who talks about the rise in oil consumption driven by consumer behaviours in online shopping - more vans, freight trains, cargo ships & cargo planes all driving oil consumption that wasn’t at these levels in the past.
Demand dynamics are the driving force in the short and medium term.

The oil price won’t be driven by Supply dynamics, Right now the short to medium term OP will be driven by Demand dynamics. Asian figures are proving that and vaccines will provide the route to increased demand in the west and beyond. That’s without even considering the destruction COVID has brought to the oil sectors capacity and investment levels. Most of the larger OPEC members now need much higher prices to rebuild their countries finances so why on earth would they turn on the taps??

Totally lost for words Tony. I used to read your posts with genuine interest and then you pen something like that? What has happened?? Oh yes..... you sold your Tullow shares. Same with Slift.
Everything (bar the small diff in 2021 prod figures) was mentioned at the CMD. Run exactly the same figures at the oil prices many in the investment/lending community now predict and Rahul gets his finances in order to deliver on his strategy. That’s without any further divestment and nothing happening in Suriname/Guyana. TLW is now a leaner more focussed business then ever before with a proven CEO at the helm.
Binary bet my arse......

I posted here in September that when vaccines start to arrive and the world restarts, then we will find an Oil sector that has been decimated in terms of capacity & investment. At that point oil prices will move firmly in one direction only. I think we are approaching that time now.
Interestingly oil prices are now moving before the mad rush to travel has begun, although I believe aviation only accounts for around 9-10% of oil consumption. Current Asian demand for oil looks strong, so lots of evidence building to sustain a higher oil price. Not forgetting other factors like Big boys moving out of Hydrocarbons, Biden policies etc, etc. So lots to support a good RBL conclusion in my opinion.

Totally agree Sageman. There are an increasingly number of bullish stances on oil prices now, supported by some decent evidence. Sure there is some execution risk to the plans for Ghana, but in Rahul, TLW have one of the best, most well respected CEO’s to manage this and I’m confident he will sort the RBL. News on this will be key of course, If the lending banks see a future, the wider market will follow. It wouldn’t surprise me too if Rahul manages to monetise the thicker oil found in Guyana too if oil prices play ball. Lots of upside here and we haven’t even discussed Kenya or Suriname yet.

I’m tempted to agree TCF. When the dust settles, in 12 months time this could be worth 2-3 times the current share price. The combined group will not only have large production reserves, but some significant assets should they wish to divest.