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Sorry Ammu, but OGA data doesn't lie.
ENQ production has been averaging between 31-33k for the first four months.
ENQ reported production @ 32k for first four months.
You talked about decline of TEN.
First half production at TEN = 17.4k
TLW's guidance takes into effect of decline in H2. FY guidance for TEN = 16.2k bopd
So H2 guidance for TEN = 15k, and i'm sure TEN will outperform guidance at current decline rates as the new drill in Enyera comes online later in the year.
"Struggling ??? I won’t call 35k production as struggling"
Yes, struggling.
First quarter production @ 32k
No way Kraken will produce 35k bopd in 2021, and production will further decline in 2022 as no drills. Expecting production to be between 28-33k in 2022 for Kraken.
No, I don't think I deramped.
And no, if I wanted to, I can buy ENQ right now. ENQ has mitigated short term impacts with golden eagle, but that field is relatively small adding only 18m reserves over the next few years.
But as i've said unless there is an attractive proposition (with low development costs) to bring Bressay to production the future of ENQ is questionable - especially as ENQ's flagship Kraken is struggling and declining with no drills planned to offset the natural decline.
Ammu,
"Also TEN production is declining"
Lol really? ENQ's entire portfolio is declining though lol.
Magnus, Kraken, Malaysia and the other UK assets (except from their newly acquired Golden Eagle) all declining because of lack of CAPEX.
Sure ENQ may outperform TLW in the short term, but with maturing fields and development costs of Bressay/Bentley, it's definitely looking more Rosey for TLW than ENQ in the long term.
SharingGuy,
800mmboe would require nearfield exploration and developing nearfield prospects. This is currently not within development, nor proven. This part of the project would be Phase 3, which will be late life opportunities for the fields.
The 2019 development plan was looking at development over 21 years.
The first phase would be 60k bopd for 4 years before it starts declining.
The second phase will boost this to around 80k bopd for 7-8 years.
The rest of the production period will have natural decline - with production falling fast over the period.
The 2019 plan was for 560mmboe development - which at 2019 oil prices would return c. $4-5b ($2b return for Tullow)
It's a lot more complicated than your calculation below.
Tullow have license for production up to 2044 and if FID is made this year, that will be around 20 years of production, but it's more like 10-12 years of good production before natural decline takes place.
Even with natural decline, unless nearfield prospects are developed in phase 3, meaningful production will end by year 15.
"so $3b return across 27years = @$100m per year or 7p per share per year.
My maths must be wrong somewhere because these numbers are a non-starter!"
$2b across 20 years, averaging @ $100m/year, but in reality, it'll be 10-12 years of plateau production so majority of the $2b will be produced across these years so pushing to $200m/year for these years @ $55/barrel.
My expectation is that Tullow will reduce the life of meaningful production period by increasing plateau production early on and accelerating reserves.
But we'll find out soon!
SharingGuy,
Kenya has potential to have GROSS recoverable 2C resources in excess of c. 800 mmboe (unrisked).
But my understanding is that the first phase of the development will look at three fields within Block 13T and Block 10BB. Tullow will stick to these three fields for development, but use data from the EOPS to optimise by targetting wells with the most productive with most consistent reservoir performance.
As part of the redevelopment, Tullow will be trying to both improve the first phase production whilst trying to offset opex/capex costs as well as subsequent phases.
The risked NET 2C resources for Tullow (as per 2020/2021) is 171mmboe. I estimate according to this figure, the above three fields in the first phase will be around 65mmboe (before optimisation). With optimisation, we can expect an increase to between 65-80mmboe.
Without redevelopment, the foundation phase wouldn't even payback the investment @ $55/barrel due to the pipeline build costs.
I think $30b is overshooting.
For the redeveloped Kenya project, I have an estimated return of c. $2b for Tullow @ $55/barrel, over the life of the asset - pushing to $3b should they explore and develop nearfield prospects.
@Stockbuster,
https://gyazo.com/d4449ff2f09c1ac1aa539711e1d02bf6
https://gyazo.com/6d880f343fd6ace0db65d3063810b9ad
@scrodingerscat,
"And if it doesn't translate you will find oil companies doing share buybacks and paying out chunky dividends.And if it doesn't translate you will find oil companies doing share buybacks and paying out chunky dividends."
Yup, but will that persuade investment from investors? I'm not too sure.
Any confidence for investment in oil and gas will be from sustained oil prices of $70+/barrel.
Either way, provides opportunities for oil companies to reduce debt significantly and become more sustainable from FCF alone. But even then, i'm sure people are going to be chasing FAANG stocks until there is no more cheap borrowed money.
Earnings are due for major oil next week.
https://www.telegraph.co.uk/investing/shares/profits-will-grow-seven-fold-oil-stocks-set-bumper-2021/
IF oil stocks are valued in line with oil prices, stock markets, value for money etc.
Tullow would be worth at least 100-150p/share, IMO.
Sadly climate change and emissions has become an everyday topic for investors, banks, politicians, economists, everybody.
Despite stock markets hitting record highs since 2020 (pre-covid)
and S&P500 hitting 31% above 2020 (pre-covid)..
Not a single oil major has surpassed 2020 (pre-covid) levels.. despite Brent oil prices being 20-25% higher than 2020 (pre-covid) levels.
Value stocks have simply been out of fashion for the past 18 months and very undervalued.
Todays markets are just stupid and there is no real value for money currently, thanks fed.
y11-shx,
"I agree don’t sell unless your name is Slift how low you gona drag us bubble boy?"
Must be hard for you lately.
I'm fairly confident in all my investments thanks :) I have more than enough holding in cash to top up on opportunities.
40-41p is the next top up target for me. Whether we get there or not, wouldn't matter to me.
Lmao, it really is amusing how you're more worried for me than I am for myself
Maybe you should worry about yourself?
Tullow is 15% of my portfolio, so pipe down lol
I'll be more than topping up if it ever gets to 33p again.
No, It's not anywhere near bubble point.
But an infinitely declining reservoir pressure will reach there, and the GOR will be impacted overtime as the reservoir pressure reduces - is the point I was making.
"but conversely injection over time, while lowering oil decline (or temporarily raising production) raises associated solution gas production over time."
True, but gas injection in Ntomme is a simple solution for 2021 to maintain production. It's better than doing nothing and have the field decline further.
TEN fields seem pretty complex to me and I don't believe TLW is ready to develop the fields further with production wells yet following 2019 disaster.
Troughsnout,
GOR is inversely proportional to reservoir pressure.
Production of oil = reduction in reservoir pressure
Reduction of reservoir pressure = lower production from each well (on natural flow)
injection of gas (compressed) or water = increase in reservoir pressure
But unless you inject more than you produce, you won't offset reduction in reservoir pressure, only reduce the rate of decline.
The gas production from these wells is to do with the bubble point.
Two ways to adjust the bubble point - Temperature or Pressure.
Temperature in this case is constant.
Simple way to shift it is with pressure.
In TEN's case, the existing Ntomme wells are drilled such that water injection will impact (and increase) the watercut of one of the production wells. Thus, to improve the reservoir pressure, gas injection is the better solution.