Member Info for Slift

"chesee
RE: Blue30 Jul 2020 14:22
Looks like it’s filled the gap should bounce from here just loaded up again as looks very cheap again"

"chesee
RE: Rumours of more production28 Jul 2020 12:52
Yes and as mentioned this will move quick I just loaded up again"

"chesee
RE: One day in the near future28 Jul 2020 09:37
Yes notice Brent up buys should come here head back 6p+very cheap just loaded up again"

"chesee
Hur28 Jul 2020 08:40
Absolute bargain just loaded up"

"chesee
RE: New Ceo has huge credentials22 Jul 2020 13:35
This as we know so cheap maybe news in morning for update to send this above 6p then up from there
Just loaded up again"

"chesee
RE: Buy21 Jul 2020 11:48
I managed to load up personally think should bounce from here"

"chesee
RE: HOLD20 Jul 2020 15:35
This is mega cheap at present loaded up here and loaded up on imm this morning to huge buys on there news on the horizon"

"chesee
Hur10 Jul 2020 08:31
Wow so cheap just loaded up"

"chesee
RE: Adding07 Jul 2020 15:07
Yes I just bagged another load so cheap at these prices"

I cba to go any further back. But keep "loading up".

No, but cashflow will be used to fund costs.

Free cashflow is essentially the surplus that can then be added to cash in bank.
The person is implying that free cashflow will be $113m.

"- “Assuming 16kbbl/d in 2021 and $45/bbl , we estimate US$113mm of cash flow from operations. “

Let's first substantiate this net cashflow figure.

16k bpd = 5.8m bpa which implies cash per barrel of $113m / 5.8m = $19.48
Cash costs of production at some $45 - $19.48 = $25.50 per bbl."

Yeah, let's not factor in finance costs (convertible bond, FPSO), CAPEX costs, G&A costs, and any other costs.

There is no way Hurricane is going to produce $113m/pa unless oil (or production) increases significantly.

ALL IMO. Slift.

I genuinely hope that every new investor here does their own research, rather than follow the nonsensical posts on this BB.

Lol 19k production guidance?
Ok. Dreamers can dream.

Cluelesstim,

There's a table at the bottom of the trading update.. showing forecast (for FY20) and actual (for H120).
It's easy to see from their updated guidance (of 71-78k for the year) that production will decrease in H2 20. The table just indicates that Tullow forecasts that Ghana production will decrease in H2 20.

Slift.

But nothing mentioned around the current rates on Jubilee or TEN thats been for July.

The rates for H1 are mentioned. You can work out Q2 rates.
I think if you're expecting current rates and information, that's only available to an insider.

Q1 trading update: https://otp.tools.investis.com/clients/uk/tullow_oil/rns/regulatory-story.aspx?cid=495&newsid=1387272

Nothing has changed. The interim results isn't due until September. It takes time for employees and CFO to put accounts together.

Everything financial is provided in the update.. Just not provided in a table format.

*September

cluelesstim,

The Trading Update wouldn't provide any significant numbers. The trading update is just a quick update, I don't believe it really needs much explanation. I mean.. it's just a trading update for H1.. with all the figures to update us in regards to net debt, revenue, realised oil price, any major updates.

Wait for the Half-Year Results in August for more information.

I think it's based on oil price, demand, supply, inflation etc.
Long term oil price assumption is usually 5 years forward looking.

I don't think it'll be possible by year end. Forecasts by instituitions for end of Y21 is $50-55/barrel. Oil price needs to rise significantly with forecasts indicating $60+.

*Circa. $270m from reduction of longterm oil price assumption from $65 to $60.

Cesna,

Uganda as an asset was valued at $1000m in 2019 accounts. Since it was only sold for $575m, i'd assuume $425m to be an impairment/write-off here.

Circa. $370m from reduction of longterm oil price assumption from $65 to $60.
Circa $Xm for reduction in forward curve prices (near term oil price forecast as mentioned in the Trading Update, this would be around $800m for $15/barrel reduction I think)
Circa. $Ym for other write offs.

DireEmblem,
"I would rather take a slow and steady approach."
I'd rather like some uncertainties resolved rather than increase in production. I don't see this as a long term investment yet. Even "slow and steady approach" is questionable. The FB model and the current situation with Lancaster - I'm questioning this everytime I consider holding for long term.

SpruceGoose2,
"imho, only if or when the flow/time/bhp's of the wells indicate minimal or acceptable 'interference' and water-cut."
Even attempting to get an indication of this comes with risk. Anything above a "stabilised" rate could increase watercut or interference.

"It's highly doubtful (imo) that the Hal end would 'see' pressure changes from the lancs end"
It's very possible to see pressure changes at this end if the fractures are connected. All it requires is one small fracture leading to Halifax. Obviously there is no evidence - so as you say will require drilling and monitoring both.

"If the data thus far - and Dr T's interpretation, of course - is correct, then the >500m bbl connected fluids seems reasonable"
Yes, the decline in the gradient of the decline of the BHP (if that makes sense) would be indication that the network is much bigger. The data is showing that the connected fractures are also decreasing in pressure (but in turn increasing the BHP of the reservoir - basically Le Chatelier's principle), hence the decreasing gradient as more bbls produced.

Personally, I think the reserves at Lancaster are great. Even if it's much less than DrT's prediction of 500 mmboe connected fluids.
But as above, i'm questioning the feasibility and longevity of economically extracting oil out of FB at lancaster. No point having millions of reserves if you can't extract it economically in the long term.

DiveCentre,
Imo, those well results are no longer relevant. But sure well 6 may not be able to continue for long periods of time at high flow. I think even 13666 would be difficult now considering the watercut has increased four-fold.
It's naive to think that watercut will not increase with rate of production.
It's unclear the maximum flow the ESP will handle. Producing 14k fluids from well 7z (a 3.5k increase to current) at 55% watercut would provide the required 6.3k bopd. But can the ESP handle 14k fluids? Would there be no interference? That's the risk that the certain idiots on this BB want management to take.

Hi Soundchaser,

I don't like to provide recommendations or advice to others on buying, selling or holding. It's up to the individual to do what they think with their investment.

As i've said regarding the update, I don't see any immediate threats to the company. There are uncertainties (as cluelesstim pointed out) regarding the information provided in the Trading Update. But these uncertainties aren't quite "negatives", but rather that investors are left guessing. For example:
- FCF for the year is expected to breakeven - This isn't a negative. But the uncertainty here arises as to why did it go from the company providing +$75m earlier in the year to +$0m?
- $200m less liquidity - We already knew this from June Circular when the borrowings went up to $3255m. So again, the uncertainty here arises as to why did liquidity decrease, as no explanation provided.
- etc.

I always view stocks conservatively and/or bearishly. My view:
Is Tullow a going concern? Yes, it has been for a while. There is a liquidity concern, oil prices are depressed and Tullow has a lot of debt to pay. Let's be a bit more bearish and say that in accordance with the most recent Trading Update, production is also going to decline.

I think the biggest questions here are: "Can debt be managed?", "Can liquidity be managed?", "Will oil price increase going forwards into 2021/2022?"
As it stands, the answer to all is yes.

Debt - Tullow is still paying interests to banks and bondholders. With the Uganda sale, net debt will decrease. The risks here are that if oil price drops further for extended periods of time, then Tullow MAY make negative cashflow, therefore may have to borrow to service debt. RBL and Bondholders are happy as long as they get their interest payment and if debt is manageable. I'd like to believe Tullow has room for negotiation with the RBL (in regards with covenant/liquidity tests) and to extend maturity of the senior notes due in 2022.

Liquidity - Tullow has cut costs and reduced/deferred CAPEX. Tullow has stated that the company expects cashflow to breakeven for this year. That's including the decline in production Tullow expects for H2 this year. Obviously oil price plays a big part here, but hedges have minimised the impact of fluctuating oil prices.

Oil Price - This is one that Tullow can't control (other than with hedges). But this affects all companies in this sector. The O&G sector is one that has been severely hit by this pandemic, and even in this scenario, Tullow has performed well. Going forwards, instituitions are predicting oil prices will recover in 2021/2022. Not many companies can survive in this environment at depressed oil prices for long periods of time.

Finally, will Tullow's SP be a rollercoaster ride over the next few months?:
Yes. I see Tullow's SP going through rollercoaster rides in line with oil prices, economic data, stock markets and the fight against COVID19. But this sector will be rewarded when economy re

The wider market, brent prices and general economic information has also influenced the SP drop today.

I don't see any immediate threats or impacts for Tullow in the long term from the Trading Update alone. Sure there isn't enough clarity, but nothing major was reported.

Hedges:
Very very disappointed.
Tullow procured the additional 4% hedges for 2021 at a floor of $33/barrel.. --> probably like 3k barrels.
Yeah sure probably can't get any better rates in today's market, but I think Tullow could have waited until later in H2 for these.

Impairments/Write-offs:
Tullow's Namibia PEL37 license expires in March 2021.
I wonder if they included this as an expected write-off for this year?
Last i heard, Tullow and venture partners are waiting on well results from drills surrounding Namibia before decision on further exploration in this block.

"Have I misread something here...."

Yes.
"bopd" = barrels of oil per day
"barrels/day" = total barrels/day (including water)

Now post your comment.

Can Hurricane really achieve 20k bopd with rising water cuts?
The answer is yes.
With 6 well on natural flow, it's possible to increase the choke size to achieve circa 14-15k bopd. Although this will come with a slightly increased watercut.

The 7z well however, is limited in my opinion. I'd imagine the ESP to only deliver a certain range.
Currently 10.6k barrels/day produced on 7z. If 6 well does produce more, the VSD on this ESP needs to be turned up to decrease the interference on the 6.
I see maybe 12k barrels/day produced here.

IMO, increasing the production from here comes with huge risk. Not just for the stability of production, but also the fracture network.
At the above rates, AM will be circa 85% utilised. This may also provide uptime issues with the AM.

So is increase to production worth the risk? Post your comments!

adoubleuk,

"By the way, I bought back in yesterday just 'for fear of missing out'. The RNS wasn't as positive as I would have liked, but a step in the right direction. Nowhere near my initial holding, of course: I'm not that daft. But I'll trade the heck out of this (when I've nothing better to do) if the opportunity arises ! RNS by RNS.."

Pretty sensible thing to do.. unlike these chancers and gamblers on this board posting "20k barrels" every 5mins and not understanding the full risks to this company.

Oxy's share of Ghana assets being negotiated again.

Ghana + UAE = $4.5b

https://www.bloomberg.com/news/articles/2020-07-29/occidental-said-to-discuss-4-5-billion-asset-sale-to-pertamina