Member Info for Slift

Oldtimer, can you support your posts with facts and evidence?

In my opinion, i think everyone knows that there is a possibility of the lockdown going longer than many think. How do you know if this risk hasn't already been priced into the share price?

Also, a second wave will affect the stock market equally as Tullow. Would be interested in how you've come to the conclusion that "Tullow will not last longer than lockdown".

"Agree it’s far too high today given the poo"
*and the sentiment on this board.

JUST GOES TO SHOW that none of you influence the share price :)

Xel,

Tullow has saved ~$850m in operational, CAPEX, other costs for this year compared to 2019.
I honestly cannot answer whether $936mill is enough for the rest of the year.

Tullow is required to satisfy the lending faciility every 6 months.
The next amortisation "commitment repayment" is in 04/21 - around $25-30m at a guess
The next bond repayment at 07/21 - $300m.

On top of that, you've got maintenance costs and other operating costs which you need to factor in. But you also have business interuption insurance, and i'm sure that interuptions due to COVID19 will be paid out!

Hope that helps!

bernie,

Tullow has 40% hedged at $53/barrel for 2021.

No idea about PMO/Enq :)

PMO/Enquest have not provided their %

xel,

Yes, we should get the revenue from hedges as the revenue is based on the realised oil price and the number of barrels produced and SOLD.

The current production is estimated to be 70-80k barrels/day.
Assuming we don't reduce production, and get an average of 75k barrels/day.
Total barrels produced --> 27.4 million barrels/year (assuming 365 day operation)

From hedges --> 16.4 million barrels/year sold at $57
so 60% of our 2020 revenue would be $936million.

Other 40% depends on oil price.

Hope that helps!

Here's a breakdown comparison between Tullow and competitors:
Assuming current WTI spot price of $13/barrel

Tullow:
60% hedged at average 57$/barrel for 2020
Breakeven cashflow @ $35/barrel for 2020

PMO:
30% hedged at average 60$/barrel for 2020
Breakeven cashflow @ $35/barrel for 2020

Enquest:
20% hedged at average 65$/barrel for 2020
Breakeven cashflow @ $25/barrel for rest of year

Cash Flows at WTI 13$/barrel:
Tullow : 0.6*$57 + 0.4*$13 = $39.4/barrel --> POSITIVE cashflow

PMO : 0.3*$60 + 0.7*$13 = $27.1/barrel --> NEGATIVE cashflow

Enquest : 0.2*$65 + 0.8*$13 = $23.4/barrel --> NEGATIVE cashflow

DO YOUR OWN RESEARCH :) (and correct me if i've made a mistake!)

0.6*$57 + 0.4*$12 = $39.

That's above breakeven of $35 for Tullow :)

Spot Prices as of 11:18am:

WTI - 13.57$
Brent - 25.73$

Is it fair to compare 2020 to 1999?
- Infrastructure?
- Modernisation?
- Lifestyle?

Whilst it does cost Saudis ~$3/barrel to produce from the ground, they do not have the refinery capacity for more than 1/4 of this. So in effect, their costs for usable products is a lot higher (not to mention export/import tarrifs).

In 2019, Tullow had a Breakeven of 49$/barrel. Hence the cash flow was £355m for year end 2019.

It's impressive how Tullow has managed to save costs of $850m to lower than breakeven figure to 35$/barrel. (and that's WITHOUT Asset Sales).

I have full confidence in Tullow for the long run :) But do expect volatility in the short term.

ALL IN MY OPINION :)

1386million barrels* not per day lol

160 million barrels in oil tankers (The Guardian)

Daily demand predicted to drop by 9.3 million barrels/day (IEA) for 2020.
Let's assume the world stays locked down as current until end of June.
The current daily consumption is predicted to be 70 million barrels/day (There are reports predicting that demand has dropped 30 million barrels/day)
OPEC+ cuts etc is roughly 20 million barrels/day effectively (Source: Trump)
Surplus in oil: +10 million barrels/day supply vs demand

~70 days until end of June --> 700 million barrels/day surplus
Total surplus of oil in tankers + future excess supply = 860 million b/day (NOT TAKING INTO ACCOUNT the amount stored currently in strategic reserves and other storage facilities)

Assuming Supply = Demand and the world gets back up to speed at consuming 100 million barrels/day from July:
Opec+ to cut 7.7 million barrels/day from July --> December --> supply at 92.3m barrels/day
180 days --> taking the 7.7 million barrels/day from storage = 1386 million barrels/day

The stored oil in tankers + surplus to come will be used up by the end of this year.
WITHOUT TAKING INTO ACCOUNT:
- The cancellation of rigs/drilling which would reduce the total supply of oil
- The possible reopening of countries in May/June.

ALL IN MY OPINION :)

There's a lot of factors that should really be considered that may impact this such as operational impacts from COVID19, business interruption insurance, oil storage etcetc.

But i'm just putting things into perspective for Sydm19.
Even at worst cases, bankruptcy is unlikely for Tullow assuming the lending facility sides with Tullow in these harsh times.

You only really need to know the worst case. Hedging only makes the case better, but I also haven't accounted for repayments.
the $700m is including cash in the bank. Asset sales are a huge unknown under current situations, but again only makes the case better for Tullow!

Accounting for repayments until 07/21, tullow has $374m headroom (assuming tullow withdraws to pay the excess)
Hedging (assuming current oil prices):
0.6*$57 + 0.4*$18 = ~$41.4/barrel

At $41.4, cashflow is at: ($3.312m -$2.8m)= +$0.512m/day

From now until July 2021: ~450 days = ~$230m free cashflow

$374m + $230m = $604m in undrawn and free cashflow
$96m drawn.

Will Tullow's RBL lending facility be happy with that in 6 months time? I think so considering the circumstances faced in the oil industry.

ALL IN MY OPINION :)

I'm an engineer and in no way a finance expert. The way I look at the RBL funding and this share on operations alone and not external cost factors is below. Please feel free to point out any mistakes in calculation or understanding! :D

$700m in undrawn facilities and free cashflow.

80,000 barrels/day @ $35 breakeven = $2.8m/day
80,000 barrels/day @ $18 (current WTI) = $1.44m/day
80,000 barrels/day @ $5 (worst case) = $0.4m/day

At $18, cashflow at -$1.36m/day
At worst case, cashflow at -$2.4m/day.

With the $700m headroom:
At $18/barrel oil price: $700m/$1.36m = 514 days until fully drawn
At worst case $5/barrel oil price: $700m/$2.4m = 291 days until fully drawn.

From Business Update: "The next scheduled amortisation of $211 million (commitment reduction, not repayment) will therefore be in April 2021. This amortisation schedule continues every six months until final maturity in 2024. The next contractual maturity in Tullow's capital structure is the $300 million Convertible Bond in July 2021."

- $Xm "commitment reduction" of amortisation at 04/21. Every 6 months (8 payments in total. $211m/8 = $26m)
- $300m needs to be paid by 07/21

Positive hopefully, we will all find out what the share price will be at 8am on Thursday!

Worried about bankruptcy? Or is it the fear of missing out? I wonder ;)

Coffeecups

Please go read rd12's posts this weekend and last.
IN MY HONEST OPINION, almost every post is negativity - the outlook of this share, the outlook of the current crisis, his own life, and has even undermined others' unfortunate circumstances.

I'm no psychological expert, but I'm sure most people on this board are tired of his "illness" :)

P.S Call me what you want - "a nice person, a keyboard warrior", but i'm simply here for balanced thoughts and opinions on this companys performance and operatiions, the industry and the share price.

Lol rd12.

You are very scared of this virus mate. Do you have an underlying illness? or is it just a mental ilness? :)

Opening Up America Again :)

What's that? +5m barrels/day in the short term?

rd12, you sound scared lol.

You're scared of the virus.
You're scared of losing money.
You're scared of taking risks.

Maybe investing isn't for you?