Member Info for Slift

DiveCentre,
I have seen the presentation slides multiple times before. The slides aren't new to me.
But this was the first time watching the entirety of the webcast. I think I did watch first 5mins or so before when CaptainSwag directed me to the webcast where Trice had said that the reservoir may be connected to 1/2 billion barrels.

Isn't the CMD supposed to be something that companies use to attract investments and/or shareholders to invest in the company?
I am actually surprised to see them reading off the screen.

Wow.. I watched 1hour and 10mins of three directors reading word for word off a screen to present a 48 slide presentation.... zzzzz......

Didn't realise that Hurricane had already spent the $22-27m CAPEX for long lead items.

CaptainSwag,

I think there is still some confidence as such knowing that the wells were producing at 17k bopd at shutdown.
But honestly wouldn't be surprised if both wells are at significant watercuts..

Hurricane clearly didn't want to provide us with the restart pre-ramp up flow rates, and I wouldn't have expected them to provide us with stabilised flow rates yet either.
Last time it took 2.5-3 weeks for RNS confirming stabilised production rates, and that was just for the 7z well.

With reports from certain people that claim to work/live nearby AM, it's clear that Hurricane are currently producing. Whether that's just from well 6 or 7z, or both we don't know.
But i'm confident enough to expect upwards of 12k bopd, but more likely to be 15k+ when both wells are back on and stabilised.

I think we may see combined watercut of 30-35%, or even close to 40% at a worse case.
More concerned about well 6 rather than 7z though. I'll accept anything below 15% watercut on this well as a positive.

Slift.

"News on production level and water reducing would be nice. Expect an increase 18-19k bbls per day"

More like.. Expect 15-17k bopd.
Will be very disappointed (again) if they don't provide production guidance with the next production update. Expecting 14-14.5k bopd for the year guidance.

"The Company entered into a Forbearance Agreement with the AHG which initially expires on 11:59 p.m. GMT on 31 August 2020 (the “Initial Expiration Date”). However, the Initial Expiration Date is automatically extended on a month-by-month basis, provided that such extension will not apply to those forbearing holders who notify the Company of their intent to withdraw from the Forbearance Agreement."
Almost 31st August, and hopefully bondholders have not withdrawn.

I'm kind of clueless regarding Petra's operations atm.
They could be outperforming with diamond finds and sales.. but at the same time could be in big big trouble. Hard to say, but one things for sure - restrictions due to COVID19 has been relaxed worldwide.

Regarding asset sales (yet again), didn't Petra offer Williamson's mine to the Tanzania government?
I think (think as in my own opinion) we will AT THE VERY LEAST see a sale here.
Pretty sure Tanzania's government has been safeguarding ALL their mines and protecting them for it's people - either by buying stake into the mines (as we have seen in Williamson's mine) or by fencing to ensure that locals benefit from the mines and to prevent illegal mining.

ALL IMO.
Slift.

adoubleuk,

"Zabba the Hutt"
Made me laugh :')
"they're even allowed on a helicopter"
Maybe he took a ferry..? haha :)

I haven't actually watched the CMD, maybe like the first 5minutes of it as an intro.
I will have a watch now.

My comments regarding the "directors" being on site to oversee comes from experience. I have come across "operations", "technical", "planning and technology" etc. directors (from other companies that I have worked with) that are not a member of the board, but instead oversee projects or operations. i.e. I could not find them listed as a board member on the company website.

"I don't see Dr Trice as one of those people." "He's probably enjoying his newfound freedom"
Possibly, but being sacked is just bad reputation overall. It's like a blackmark against your name, something that will be on the internet (due to press) for the rest of your life. I don't know Dr T, but I can bet that even he doesn't want this against his name.

I don't know many companies that have actually "sacked" a director, but mostly has been "by mutual agreement".
Using Tullow as an example here - where the CEO and the Explorations Director both resigned with mutual agreement after a shocking performance in 2019: https://otp.tools.investis.com/clients/uk/tullow_oil/rns/regulatory-story.aspx?cid=495&newsid=1351030

"I still feel you've got some catching-up to do regarding the company history, not just technical."
Thanks for your kind words, but I agree too that I haven't really caught up. I have only really read the most recent RNS', annual report, and seen some presentations to draw my conclusions and thoughts.
I see this as an investment and nothing more to be honest. I have an investment here since the start of July, but have been closely following on an RNS basis since the start of the year.

I'm not here to do "work" to figure out what Hurricane should do next. Nor am I here to learn the full history and past of this company as this makes little difference to the future of this company and my investment.
I simply do some analysis/estimates on a forward basis using information provided by the company - mainly out of hobby/interests.

Slift.

adoubleuk,
"Nevertheless, he was introduced to us during the CMD webcast as 'Production Operations Director'. That sounds pretty much like an 'executive' role to me, and rather vital."
Not quite, I don't think a "Production Operations Director" would be on the board. A Chief Operating Officer would be on the board. The the Production Operations Director likely reports to the COO and/or CEO. The production operations director is someone that will be on site overseeing the site operations, imo.

Increased their holding in July, prior to the update in August regarding Lancaster reserves downgrade.
As a major shareholder, they are probably privy to some information we aren't.

For an instituitional investor to be adding even before the technical review update is definitely confidence in the current board, the technical review and even the future of hurricane. Especially when Hurricane have yet to provide any information that is worth investing for.
Whether that's a gamble on their part or not, who knows.

Looking forward to more investment from II's in the future should Hurricane have a future.

ALL IMO.
Slift.

JoeSoap,

Thanks for the link.

"I also believe he went, not pushed"
As DC said, I think the fact that it was "mutual agreement" - he was essentially sacked. But being sacked as a CEO is very bad for reputation. So most likely BoD gave him a choice - Resign as CEO and a member of the board or risk being sacked.
It's in Robert Trice's interests to leave with mutual agreement, rather than a disagreement and being sacked.

"wrt AM, his LinkedIn says Pharos [SOCO]Apr 2004 – Dec 201915 years 9 months."
I saw this too, but contradictory information in the RNS : "where he was Chief Operating Officer from 2012 to early 2020"
But agree that he has already been contributing to the technical review. Who knows, IT MIGHT BE HIS IDEA that the OWC might be shallower and that the reserves/resources may need to be downgraded.

Just my opinion.
Slift.

Longish,
IMO, unlikely to see FID by year end 2020. This was the original expectation, but then the timescale was impacted by access rights and commercial agreements with Gov of Kenya. Then ofcourse COVID and Force Majeure.
I believe that the JV was still working on critical activities for FID during this period, but will be very surprising to see FID by year end, i'd give it 50/50.

"I guess also we wont impair kenya at yearend. $667m at the end of 2019 i think."
Impairments to Kenya likely taken into account for H1 Impairments.

ALL IMO.

Nice on harel,
Tullow owns 50% of this block. At $55m to drill, it would be close to $27.5m costs to Tullow.
Most likely Tullow would farm out 20% of this block to reduce the costs by c. $11m.
Recent finds from Apache has probably eased this farm out process. Will be more clear at the interim results.

@Neversellshell22,
"They need to do the opposite of PMO"
I agree. The problem with PMO was that their net debt of $1.97b had a maturity in May 2021. Despite this, they went ahead with the purchase of the BP assets.

So ofcourse PMO's creditors would want to safeguard their money and the recent creditor agreements/refinance was expected (with the requirement of PMO raising cash). It's not all bad news for PMO though, the maturity of this debt has been extended to March 2025 with PMO raising cash to fund BP assets as well as to reduce debt. In a way it can be seen as a win win situation for the long term for PMO and lenders, with unfavourable negative impact to equity in the short term for shareholders.

In Tullow's case however, the RBL facility matures in 2024. The senior notes, $650m and $800m, matures in 2022 and 2025, respectively. The Converible bond matures in 2021. However, this is more complicated as the RBL also has scheduled repayments. Tullow's debt maturities (as it stands at end of May):
2021: $300m
2022: $811m
2023: $422m
2024: $922m
2025: $800m

I wouldn't be surprised if the $1b raise from portfolio management was initiated by Tullow's lenders. Expect this $1b raise to be completed before end of 2021. At that point, Tullow will either see an agreement with creditors for an extension to RBL (possibly with further cash raises as we have seen with PMO, either assets or equity) - all depending on oil price and cash flows.

ALL IMO.
Slift.

Steve,
"would be great to see 60p by xmas I need another summer toy next year!! haha maybe I should have jumped on PMO instead..."
Do you still wish you had jumped on PMO instead?

I'd suggest you do just a bit more research on Tullow for your own benefit so you can make your own mind up.
There's always risks to investing and if you don't want to take on that risk, then you shouldn't invest.

Thanks all for your opinions.

The main reason why I asked majority of those questions is because of responsibility. Who is responsible for this technical review? It all just seems like BoD are trying to avoid blame for anything and everything. This is very.. directorship/management like.
During RT's time, HE WAS RESPONSIBLE for everything he had done (good and bad) and accepted that responsibility.

Today, we have members of the Board trying to avoid this responsibility for their actions by assigning "Interims" and "Designate" leadership during this transition period. Or that's what my opinion is.

@DiveCentre
Agree with MCB55.
To answer your question a CPR (Competent Persons Report) is done by a competent person. I can assure you that even this competent person will not take any responsibility.
I.e. the report will be written in a manner whereby the competent person can avoid taking responsibility. This is seen in the last CPR - Where the report refers to such sentences like: "Hurricane energy believes that", "Our estimates are based on data and information provided by Hurricane Energy", "Hurricane provided" etc.

A CPR is just a report based on the OPINION of a "competent" person(s) who have had enough experience or credentials to provide that opinion. But the report is just their opinion based on Hurricane Energy's facts.

So bottom line, Hurricane Energy are responsible for everything. Right now, no-one is taking that responsibility.

Slift.

It has been approx. 1 month since RNS confirming that Petra was put up for sale.

I think Petra will currently be considering any offers received for assets. Obviously they need formal offers before they even notify us.
I'd give it another month for Petra to notify us of any offers. I think if no offers come, then that'll be the end of the road, IMO.
Likely companies out there waiting for Petra's admin to be able to snipe the assets on the cheap.

Slift.

From RNS 06/08/20:
"Completion of the Technical Review is expected on or before the Company's interim 2020 results on 11 September 2020, at which point the Company expects to be in a position to notify management estimates of reserves and resources for the Lancaster field, prepared in accordance with the Society of Petroleum Engineers' Guidelines for the Evaluation of Petroleum Reserves and Resources."

Reading this, it seems like Hurricane have already "prepared" the estimates for reserves and resources for Lancaster field. Also, it reads like that they will have completed the technical review before the results, but the estimated reserves and resources for the lancaster field will be provided to us in the interim results.

Mr Maris will assume the CEO role following the interim results.

There's several questions that i'd like people's OPINIONS on:
- What about the resources for the other WoS portfolio? Will this only be provided to us after CPR?

- Will they release the technical review before the interim results? What do they have to gain in completing this tech review in such a short time and releasing during this transition period of Interim/Designate CEO's?

- It seems like this technical review is completed by Bev and the BoD and then passed onto the new CEO. What (who, and why) is influencing them to complete this technical review before handing over?

- It's not as easy as just finding someone on the market to fill the CEO role. I imagine the interview process, notice periods etc. will have taken 3 months+ to recruit Mr Maris. It has been less than 3 months since Dr T's resignation. Is it possible that the board already had this person as a candidate before they forced Dr T to resign?

Just looking for peoples' opinions.
Slift.

Hi marcus-aurelius,

Tullow has been fighting survival for a while now. I'd argue that Tullow is now in a better position than they were approx. 6 months ago. Yes, Tullow has a massive debt (Over $3b for a company currently valued at £316m market cap). But whilst this debt may seem huge, it's manageable currently. But Tullow really does need to refinance via extending RBL or other means going forwards (into 2021).

I disagree with your statement that Tullow needs $50/barrel "asap" to survive. I don't know what calculations you have done, but here's the facts:

As at 31st July, Tullow has circa. $250m cash in bank. This can be worked out using the borrowings and undrawn facilities available to Tullow aswell as the net debt (provided in the trading statement). Tullow will also receive $500m from Uganda proceeds. That's $750m in cash. Then you have available undrawn facility from RBL.

"How long can Tullow survive these low prices and still be in a position to pay off the massive debt?"
So to answer your question, for AT LEAST another 12 months (with the Uganda proceeds).
Here's what this company needs to survive:
- Have enough liquidity to fund CAPEX and OPEX costs (Note: this includes cashflow from operations and other means, i.e. investments)
- Have enough liquidity to meet finance costs and liabilities (i.e. interest payments, bond payments, G+A, any other finance costs)
- Pass RBL tests (EBITDAX to covenant gearing test and liquidity forecast tests)
- Ensure that the cashflow is constant (i.e. manage the business to ensure production is in line and costs are minimised)
- Oil price of above $38/barrel (to ensure positive cash flow)
- There's a few more but i cba to list them all (e.g. rescheduling debt maturity, etc.)

So let's do some maths:
- OPEX and CAPEX: Assuming same OPEX and CAPEX for 2021 as this year, total will be c. $700m (plus any unplanned costs)
- Finance costs 2021: circa. $350m in finance costs, $85m G+A, other costs $250m and $300m CB due in July 2021
In total, these costs come close to $1.7b for 2021 (assuming 2020's operations, but also including the $300m CB)

Will Tullow have enough liquidity?
Cashflow from operations in 2021 (assuming 70k bopd, $42/barrel 2021 forward curve) is c. $1.1b.
Tullow has c. $250m in cash, c. $500m in undrawn facilities, $500m from Uganda deal and any positive cashflow from this year (which I will ignore for this basis of calculation).
That leaves Tullow with a total liquidity of $2350m.
So yes, Tullow does have the liquidity.

Tullow will likely pass RBL tests and have so far proven themselves to have constant cashflow (with production in line with expectations). Oil price is at $44-45 which is above Tullow's forecasted breakeven cashflow for the rest of the year.

I'd like to hear why you think Tullow will be on life support next month until money runs out, and why you think Tullow needs $50/barrel "asap" to survive.

Feel free to correct on the above.
Slift

Looks like Bev is the "guinea pig" of sorts here lmao.
Wonder if the board used her to provide all the bad news under her leadership.
Now Tony Maris can have all the glory following the constant decline in SP during both Dr T's and Bev's time?

Who knows, could be more bad news on the way knowing HUR. Wouldn't put it past me. Still potential room for downside, aswell as upside.

ALL IMO.
Slift.

Hi TimmyG,

I am still invested here. I am not worried about Tullow for the time being. There hasn't been any news regarding this company that I should be worried about.
I don't know how the market will react on short term basis. But on a long term basis, I'm still confident here :)

As for analysis/discussion posts, there hasn't really been much new information that's been provided by Tullow to discuss about!

ALL IMO. GLA.

These drops past two days have been fantastic opportunities for people to increase their holding, IMO. I too have increased my holding today.

Whilst investors here are probably also worried about PMO's position, it's not quite the same for Tullow (or at least not yet that is). Nothing has changed in terms of operations or Tullow's position (unless there has been a leak?).

My only concerns going forwards:
- Uganda Sale: This should be completed within the 2 weeks (or I hope). Tullow has enough liquidity for operations, however it's the liquidity test with the RBL in September that's concerning. Even with current liquidity, Tullow should be able to to get away with it considering that they have voluntarily reduced undrawn liquidity commitments, but it's better to be on the safe side with the extra $500m in the bank.

- Ntomme9: The Ntomme-9 well is definitely concerning. Not only was it delayed (and as a result added to costs to the company), but there hasn't really been much information provided to investors at this moment. I'm sure it's nothing to be worried about (I mean, no news is good news), but I think every scenario should be considered.
A nice flowing well will add huge value here. Likewise, a write off (as in the past) will be detrimental.

- Forward Strategy: We're still waiting for this, and this will be provided to us in the September update. I do hope Tullow sticks to what they have said in the past regarding this forward strategy (e.g. CAPEX investment to improve Ghana/TEN and to farm out their exploration portfolios).

Should investors be worried here?
I personally don't think so, unless there is news on the horizon that we should know about. But I think everyone here should be aware of the following for the September half-year results:
- Tullow will make a loss due to impairments in H1
- Tullow will have likely have made a negative cashflow for H1 (due to unplanned costs and extensive CAPEX)
- Several other news to be aware of:
*Potential news on viability of Guyana Jethro development (could be good or bad)
*Potential farm out of Suriname Block 47
*Confirmation of rig being contracted for Suriname
*Ofcourse, the Ntomme-9 well test results and the forecasted production from this well

Regarding a rights issue, I also don't think that Tullow requires this in the short term. I wouldn't put it past Tullow using it as an option though. But with the liquidity available and the $500m proceeds from the Uganda sale, it's not likely at the moment.
The only debt capacity and commitments in the next 12 months is the $300m bond.

As for oil price, as it stands, Tullow will make a positive cashflow with oil price being above $38/barrel (according to the last trading statement).

ALL IMO. GLA.
Slift.

"TLW is same as PMO, half year earning will be a loss. even they get 1B£ sell cash, (long time to sell)
but they have 3B£ debt. also low share price, mean , debt holder control the company than shareholder. lot of people here think TLW is better than PMO, but why PMO share price is always higher than TLW last 6 months. until yesterday, more PMO investers think they are better than TLW . now More TLW inverters think they are better than PMO. Time will tell. I think they are same fate."

It's no secret that Tullow will make a half year loss. I mean they did announce $1.4b impairments and write off. Seems like you're unaware of Tullow's financial situation.
I think Tullow's debt are still manageable at the current moment.
Also, Tullow isn't the same as PMO. Pretty sure Tullow has been above PMO's market cap for the majority (if not then the entirety) of the time in the past 6 months.