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Tullow as at 12 March, forecasted a FCF of $50-75m for 2020.

Tullow subsequently achieved +$75.8m FCF for Q1 with revenues of $386m.

Q2 to date, I've estimated +$35m FCF
For the entirety of Q2 assuming breakeven oil price, FCF would be circa +$74m

Again assuming breakeven oil price to the end of year:
Q3 and Q4 FCF would be +$91m each quarter.

So in total, Tullow is forecasted (by me) to achieve a minimum of $330m FCF, if they keep exploration and operational costs constant.

That is close to 4.5x Tullow's forecast in March.
But ofcourse since March, Tullow had lowered their breakeven by $10/barrel, contributing to 450% increase in their forecast.

Would not be surprised if we see huge jumps in valuation of this company as results come in.

DYOR. GLA.

Hi Xel,
Yeah I saw the rally yesterday.
You sometimes win some, lose some and miss some! Was definitely the latter one for me, but no worries.

Good job if you invested and good luck!

If anyone was to make a takeover offer, I'd imagine they'd offer a 40% premium for Tullow.

That would take take the company to 35-36p from yesterday's closing price.

All IMO. GLA.

Hi Oil_Run,

Whilst you've pointed out the "WHY Total might takeover Tullow" with valid reasons, here are some points "WHY Total might NOT takeover Tullow":
- Covid19, reserve cash for liquidity since their breakeven is a lot higher than current oil price
- Total have previously said that they are not looking at taking over Tullow
- Tullow have recently hired a CEO, so are forward looking in terms of growing the company forward and not dissolving - furthermore, clash of managerial roles
- Tullow have sold very valuable assets to Total (and CNOOC as part of their deal) - Total would have got a better deal if they had just taken over Tullow instead (they'd have received the entire stake)
- circa $2.8b debt as of March 2020 which they will have to take onboard (not something companies want during this period)

Just to give it a balanced view! Ofcourse anything can happen during these times when assets are cheap and companies see opportunity.

GLA.

That's more of your opinion than a fact.....
JUST SAYING!

Going to be a struggle for oil to move up from here. But once it does, it'll be a very big jump.
I expect a pull back in oil (both WTI and Brent) for the time being until we get some more positive news.

Reasoning?
Big gap up needed, so resistance needs to be overcome.
Brent: https://gyazo.com/2f6f54f474334a89aff2cb33087b1ab2
WTI the same, with gap up to $41.

DYOR. All IMO.

Dividends were suspended in December.

Don't think Tullow will offer dividends this year. Possibly not even next year either.

Xel,

I've been following LAM for a while, but never took a bite for an investment. I do know that it is very undervalued but was hesistant in investing following the oil crash.

I believe that everyone is currently jumping in on it from both twitter and also elsewhere after recent rises. Sounds like a pump and dump to me if i'm honest, but opportunity has already been missed imo. Not worth the risk for me, but good luck if you do make an investment there.

DYOR. All IMO.

I can't speak for CERP, but I know a lot of those figures regarding Tullow are misleading and outdated.

Good and Bad i'd say.
Official figures for unemployment better than expected at 3.9%.
But claims has risen to highest since 1996.

Unemployment figures won't shoot up until furlough scheme stops. So, wouldn't be surprised if no big change until then. Although it will hit hard when it does..
I don't know many that have lost their job, but do know quite a few on furlough.

Some companies taking advantage of the scheme where possible even when the company is making a profit. I'd expect furloughed staff in these companies to have a job at the end of this.
Other companies that are making a loss even with furlough scheme are probably going to have to let go most of their staff when the scheme ends.

Looks like a lot of copy and paste with outdated figures.....

Surprising Unemployment figures in the UK today.

Anyone been affected?

Yup, but the adjusted ratio could be a lot lower based on what Tullow does with the other $425m proceeds from portfolio management, excess FCF to service debt and any other savings they can achieve.

As i've stated before, in the current conditions and market, the fundamentals of this company are very strong. At the same time, no-one can predict the future with COVID19, oil prices, airlines, economy, lockdowns, etc.

All IMO.

Moody's requirement of an up rating with total debt to EBITDA: 4.0x

Did some analysis on this before.
Assuming Tullow keeps same revenue performance as in Q1 (which requires improvement in oil prices), as well as the majority of the Uganda sale proceeds go towards debt payments:
The total debt to EBITDA would be 3.3x.

We won't know the actual figure until Tullow posts this information.
Which will likely be at the next operational update (July 2020) or the Half Year Results (Sept 2020).

DYOR. All IMO.

In my opinion, not till at least June.
Although Moody said that the corporate credit rating is "on review for downgrade" I'd suspect that these credit rating companies have a schedule. Wouldn't expect a rerate every 2 months.

DYOR. All IMO.

If anyone wants to read the full RNS posted by Africa Oil Corp:
https://www.africaoilcorp.com/news/africa-oil-kenya-update-122785/

Was a general comment mate, didn't mean to direct it at you Jim, but just the last post i saw!

I don't think we'll see the share price at 20p based on negative oil prices alone. Though there could be other market forces at play which could make us see 20p:
- e.g covid19 2nd peak scare.

I don't believe negative oil prices will affect the share price much. Share price is based on the value of the company, and the value of the company is based on the assets and the future outlook/growth.
If the December 2020 contract for Brent was negative, then sure that's gonna impact the future outlook/growth of this company.

What will affect the futures oil price is the talks of prolonged oil production cut by OPEC+ through to the end of this year. Or if market and demand recovery is better than expected.

A lot of factors to consider. You do give evidence to support your opinions though laidback! Whether that is Brent price, facts or articles.
Definitely better than stating "40p on Monday climbing up steady to 50p". Opinion or not :)

DYOR. All in my opinion of course.

Capital payments are due on 20th May.
Interest payments are due by 30th May (including the 30 day grace period)
Trading update "May 2020" - No specified date on the financial calendar. Although Petra has said "late May"

So yup, update within the next 15 days on how Petra has gone about this.

42 years till retirement...

I need this up at 3000p by next year so i can retire next year!

GLA.