Member Info for Slift

Crude: +4.32m
Gasoline: -0.892m
Distillates: -4.491m
Refinery Utilisatiion: +1.7% (at 74.6%)

And now the stats that don't get reported:
Strategic reserve Crude: -0.7m
Petroleum products (TOTAL, including Strategic Reserve): -4.5m
Gasoline production: Up by 200k from last week to 9.1m barrels

US refineries still operating despite Hurricane Zeta to keep up processing of crude.
Approx. 915k barrels/day production shut in due to Hurricane Zeta (Gulf Coast, as at 27/10/20)

Libya production at 690k, said to increase to over 1m in mid nov.

GLA.

Good luck Steve.

I think this will come good for you now :)

Here's a breakdown of where Petra will be following Debt restructure:
- Notes at $337m (down from estimated $699m including coupons at 1st Nov)
- Bank loans at $53.8m
- Cash in bank at $63.4m
- Diamond inventories $90.2m
- Blue diamonds c. $70-80m

Leaves net debt at c. $167m

Meaning that Petra will have to produce around $50-60m positive cashflow for 2021 and 2022 (assuming BEE lenders are supportive).

Hmm.. A takeover..
The hassle Tullow had to go through with one government (Uganda gov) for a sale of ONE ASSET and exit of ONE country...

Imagine the headache Tullow will have to go through for a takeover:
- Ghana Gov
- Kenya Gov
- Suriname Gov
- Guyana Gov
- UK OGA
- Peru Gov (where there's already issues with exploration licenses)
- Argentina Gov
- Gabon Gov (and the multiple JV partners involved in 24 licenses)
- etc.

Also the big hurdle of shareholder approval.
Would be difficult.

"I genuinely think we are holding up well considering oil and the wider market."
Agree soundsrisky.

Nothing to fear in holding Tullow right now :)
The approval of this deal has bought Tullow c. 3 months before the next problem.

In the meantime, TLW holders will benefit from credit re-rate, trading update, CMD any upside in oil from now and until then.

The cure for low oil prices is low oil prices. Tullow is likely breakeven or making a small profit at current Brent prices ($40/barrel).

ALL IMO. GLA.
Slift

*indicates port or near port

Jimarillo,

Yes, it will be exciting to see the Venus well spud.
I'll be very surprised if it's November, but I suppose Maggy Shino said it before it was delayed.

I think it's good news that Total are still drilling this well. As for timeframe, let's just say it'll spud between 20Q4 and 21Q2.

I had used marine traffic too, but vesselfinder portrayed the location better. The co-ordinates (in both marine traffic and vessel finder) indicates port (as at 15 days ago).

GLA.

Jimarillo,

"the Voyager is currently drilling in Angola, Venus meant to follow"
Venus is meant to follow two drills in Angola.

Drilling was meant to start late August. It's likely that they've finished the first drill as The Voyager was at the shore (14 days ago):
https://www.vesselfinder.com/vessels/MAERSK-VOYAGER-IMO-9633575-MMSI-566936000

Even if the Voyager starts Venus now, it won't finish before year end. Don't forget, Venus is a ultra deep water drill.

JUST IMO. GLA.
Slift

If Tullow can reduce Kenya breakeven by $5-10/barrel, I'd rather Tullow keep Kenya. With the support of the Kenyan government, this asset could become very attractive even in low oil prices.
If Kenya is very economical to develop, securing funding for this project shouldn't be a problem once Tullow's finances are in better condition.
So the sale of Kenya can be parked. Not necessarily required anymore with the cost savings and Uganda deal.

There are still challenges to Tullow, but nothing that can't be resolved with an uptick in oil prices and farmdown in exploration assets (and refinance of debt if required).

Tullow will have approx. $850m in cash (YE20) following Uganda deal (and $925m in cash (YE20) following FID). IN CASH. Which is always a good bargaining tool for refinancing.

ALL IMO.

Probably just reading into it too much :'

BP results look good, so should influence this sector going forwards.
Other majors to report earnings this week.

GLA

So in the RNS dated 21st October, Tullow has stated everything that they had to.
- All gov-related conditions satisfied
- Close of transaction expected within the "coming days"
- Details about transaction ($500m + $75m FID + Contingent payments)

There is no further update required as far as i'm aware. They've stated all that they had to in relation to this transaction. The fact that they've stated that "close of transaction expected within coming days" means that there is no requirement to confirm this with another RNS.

So this statement is bothering me:
"Tullow will provide a further update once the transaction has closed and funds have been received."

The only further update that Tullow can provide us that is not included in the RNS are:
- $14.61m Capital gains tax (in line with pre-agreed principles)
- $15m refund/saving for CAPEX spent on Uganda
- Details on contingent payments (including 30% cap gains tax)

All of which we already know.
So what further update will Tullow provide regarding this deal?

Hurricane?
https://www.theguardian.com/world/2020/oct/26/tropical-storm-zeta-expected-become-hurricane-mexico-us

Demand falls --> Less fossil fuels burned --> Less greenhouse gases and hence "less" climate change? --> More Hurricanes?
Ironic isn't it?

In all seriousness, gulf of mexico oil drillers evacuating. Should help with oil prices, not that oil prices need helping. Expect a huge jump up in oil prices very soon.

Jimarillo,

Could be. My thinking is that since Total's drilling schedule has been delayed by approx. 4-5 months due to COVID19, it will take time for Venus-1.
I'd be very surprised if they manage to pull off the ultra deep water drill in such a short period of time.

I don't think they've even started drilling Venus-1 yet.

JUST IMO. DYOR.

davwal,

I think it's more that no-one knows yet. Even Tullow won't know. But as it stands, no drill in 2021 (if lucky, maybe 1 in Q4 21).
But I think it will become more clear in Q1/Q2 2021.

Both Tullow and ECO have decided on the next two targets in Orinduik. But it's just a matter of time of when. But with Orinduik, the licenses are good until 2024.

JUST IMO.

Lincoln Crestal well was drilled to 1780 m TVDSS.
The new estimate for structural closure OWC is 1846 m TVDSS (+- 50m).

Lincoln BASEMENT structure is estimated to contain 45mmboe 2C resource at this new TVDSS.
But an important note from the technical review:
"Work is ongoing to map the onlapping Mesozoic section on the flanks of the Lincoln basement structure. Contingent resources estimates are subject to revision as this work progresses."

Anyways, I have a small holding from earlier in the week that I wanted to offload. But may add to my holding if price allows. Still don't have much hope in HUR, but I think in the short term there is a small potential with the updates to come between now and end of year.

Agree CaptainSwag,

Lincoln will just be an addition to what HUR currently have. I mean it will boost Lancaster production, but that's about it.

One thing to note is that Lincoln achieved around 5k bopd with natural flow, and 10k bopd with ESP.
Any production that HUR are able to produce from Lincoln will add to AM capacity, but in return HUR will only receive half the production revenue due to 50% working interest.
Whether Spirit will pay part of AM rental costs i'm not too sure, but likely they will.

But what i'm saying is, a tie-back may limit production from Lancaster for when production enhancement option is implemented.
But a tieback of lincoln is less risk than hoping on production enhancement option working.

JUST IMO.

Lol yes! Mirroring Stephen to be cool!
But no, it's mainly habit when I'm on the PC - from writing endless emails zzzzzz

@supercooper,
Yes, Apache's finds were mostly in Santonian.
Tullow is looking to target Turonian and Cenomanian to replicate the geological analogue of Ghana.

I think Apache's first drill also targeted Turonian, but the drill was concluded before it hits the Turonian interval due to depth. But they had promising signs for Turonian. They will target Turonian at some point too in the future.

Just a reminder that Tullow will be drilling the Goliathberg-Voltzberg North prospect in Suriname in Q1 2021.
Stena Forth will mobilize at Suriname late December/early January.
Drilling will start in Jan/Feb 2021, and will last about 2 months. Likely spud in March 2021.

Goliathberg-Voltzberg North:
- Targetting dual targets in the Cenomanian and Turonian ages (Cretaceous)
- Depth of drill: Approximately 1900 m water depth, with total depth of 5400 m.
- Cost of well: Approx $55m ($27m to Tullow at 50% stake)
- Prospective Estimates: Highest - 938 mmboe, Best - 235mmboe, Lowest - 35 mmboe
- Chance of Success - 34%

Strangely enough, Tullow has better prospects in Block 47, namely:
- Goliathberg-Voltzberg South (37% chance of success, 3 targets, 368mmboe best estimate)
- Bernau G (33% chance of success, 3 targets, 324mmboe best estimate)

But supposedly the North well will provide more info about the area and may de-risk the other blocks/prospects.

Either way in total, Block 47 has prospective resources of 133mmboe to 4300mmboe with the best estimate being 927mmboe.

A significant/major discovery at the North well could change the whole area derisking other blocks that is operated by Tullow. Tullow's other major prospects in Suriname is within 50km of the North well.

GLA.
Slift

Total's drill is happening as it stands (delayed due to COVID, but happening nonetheless).

Due to delay in Total starting drilling, it's likely that Venus-1 won't be drilled until late Q1 2021, with spud in Q2 2021. However, no update has been provided by Total with official date still being Q4 2020.

Shell hasn't contracted a rig yet for their well in Namibia, so no late 2020 drill. If shell are to drill in Q1 2021, they should be (at latest) contracting a rig in this quarter due to mobilisation time etc.

JUST IMO. GLA.
Slift

Thanks DiveCentre.

Though there's only 3 rigs availble for Hurricane's preferred timeframe.
IMO, it's definitely a problem if Hurricane doesn't contract a rig soon. I can see oil price rising enough for UKNS operators to contract a rig for 2021.

@CaptainSwag,
Yeah, still don't see much potential in HUR. But like you say, law of averages indicates that some positives await HUR (in the short term).
Source of funding is what will be the driver going forwards IMO. I wouldn't be surprised with a dilution.

Good luck if you're invested.

CaptainSwag,

Just a PURE GUESS! A decent volume of trades today though.

HUR typically likes their early month/late month RNS updates.

As for updates, it's getting closer to end of year. HUR needs to provide their decisions on forward activity programme and financial arrangements for Lancaster, as well as development options for Lincoln.

If Hurricane are really going to start drilling for a WI, they also need to contract a rig soon or that window for Q2 2021 will pass.

ALL IMO.