Member Info for Slift

Showsnowman,

Your post has no relevance to EG assets.

Thommie, the addition wells (should they be with proceeds) won't be drilled until at least next year. All depends on if and when they get a 2nd rig.

The EG assets would have paid back approx $30m by YE21 (AFTER CAPEX) at $57+/barrel.

2 wells in TEN, or 3 in Jubilee if Tullow get a 2nd rig and starting from Q1/22.
Definitely doesn't offset the 48 production wells currently in EG.

The rig was to drill a commitment well in Lincoln if I remember correctly? With 50/50 costs to HUR/Spirit.

The termination fee was probably at 30% or 50% of the total cost of having the rig.

*2 additional wells.

Where are you?
Missing your posts already!

DireEmblem,

No.
If the new management had drilled a sidetrack late 2020 with the rig they hired, they would be in a better position right now with cashflow (and future cashflow).
Don't forget, the company had to PAY to terminate the rig. EXPENSIVE. Might aswell have drilled a well.

Should have gone with the drill even if oil prices were to average $40/barrel this year.
Underinvestment costs the company (especially one that is struggling such as HUR) significantly.

Tony,

1. Decomm costs come at end of life of assets. The RNS states "longer-term" decomm costs of $129m for BOTH assets. For arguments sake (not considering that EG assets HAS POTENTIAL for license to be extended to 2050), let's say that 2030 is end of life.
Of $129m decomm costs, again being VERY conservative, let's assume that ALL of this cost is for EG assets.
Over the next 9 years (not including 2021), @ $57/barrel oil price, EG assets will produce approx. $533m FREE CASHFLOW. That's after ALL costs, including CAPEX. This doesn't take into consideration the upsides of this asset that are planned for 2023-2025.
What's $129m after $533m FCF?

2. Reduce near term debt? with $89m proceeds.. This is equivalent to 2.7% TOTAL debt, or 3.7% NET debt. This amount is not worth anything significant to be selling very attractive growth assets.

3. Yes, the OPEX cost is higher in EG than Ghana, but EG assets produce POSITIVE cashflow (after all costs) at c. $25-30/barrel oil price.
The $89m proceeds from this sale will fund for 1 additional well in Ghana.

4. Refer to point 2.

5. Sale of these assets have no influence on farm down of Kenya. Tullow have received many bids (likely lowballs) for Kenya over the past year too. Negotiating position and sale price depends on oil price. The sale of the EG assets were discussed with Panoro at $40/barrel oil price.

6. Yes, the Suriname well is something that may offset the past asset sales. As much as i'd like to see good oil there, there's only 34% chance of success of that well. Failure to strike oil here would be devastating for Tullow as further dampens growth potential. So yes, let's hope that we are lucky.
The EG assets provide growth potential for this company for the next 9 years WITH or WITHOUT any luck or success at Suriname well.

7. Refer to point 3.

8. No, at $57/barrel, the company gains within 18 months of keeping the EG assets.
For the Dussafu assets, the payback is around 3.5 years at $57/barrel.

I personally think it's the BOD that are incompetent to attempt a drill during winter months.

"Harsh environment + unsure if we can procure equipment" so "we're cancelling the rig and will attempt to drill in Q2 earliest" yet "sidetrack planned for Q3 with finish in Q4"

Cost the owners of this company millions, while they get paid each and every month off YOUR assets. Nice.

Thommie,

It doesn't matter if oil price dips or not between now and then. The only thing that matters right now for the RBL and liquidity concerns is the forward curve (and the RBL oil price assumptions).

As it stands, the forward curve is above $57/barrel average for the next 18 months.

I get that the business is looking to operate without issues at low oil prices, but it makes NO sense to me in selling EG assets which are very attractive assets even in low oil price environment.

Unless TLW need an extra $89m liquidity in the very very short term (NEXT 2-3 months max), there is NO benefits to this sale whatsoever at $57+/barrel.
Tullow has over $1b in liquidity right now and even if they pay off $300m bond + $200-250m refinance cost, they will have enough liquidity. So wouldn't be liquidity requirement in the short term either.

Say NO to sale of EG assets.

I see the following happening:

- RBL restructured for maturity in 2028 with a debt capacity of c. $1.5b. Will likely have similar covenants to current with a 3 year amortizations, starting following 2025 bond maturity.
- $650m bond refinanced to 2029.
- $300m bond paid off.
- Cost of refinance + restructure at c. $200-250mish.

Say NO to sale of EG assets.

Lmaooooo

Keep these coming bartlebobton!
Hilarious

"exchange of a 'producing' asset for cash"

No! Over an 18 month period at $57+/barrel, Tullow is PAYING Panoro to just TAKE the EG assets.

Say NO to sale of EG assets.

Noone here will be able to change the vote.

But if oil price does keep rising, even the big shareholders will vote against it.
There has to be a point at which even Tullow says no to the sale.

I will send IR an email regarding this sale and value.

Thommie,

At $57+/barrel, it's better to keep it in the short term (18months) too!
The EG assets will payback $89m in FREE CASHFLOW (after CAPEX, OPEX, costs etc.) at $57/barrel average in 18 months.

"SAY YES TO EG ASSETS! FU SLIFT!"

You'll be "FU"ing yourself in the short (18months), medium and long term if you say yes to this sale.
Significant growth potential sold for virtually no benefits to Tullow.

Android101,

"The timing of cash flows imust be the constraining factor."
I accept this. But there's a point at which EG starts providing enough cashflow to cover it's own commitments + more cashflow to use to fund other projects (over an 18 month period - in line with RBL's liquidity forecast).
That's at c. $57/barrel.

If you tell me that oil price will stay below $57/barrel for the next 18 months, then fine. I'll accept this. But even the forward curve is $59/barrel now.

SAY NO TO EG ASSETS.

Wtf are you on about?

Do you also need to google what 3P reserves are?

"3P reserves for the Ugandan deal"

The dumbest thing i've read from you today.
Please tell me how you get 3P reserves without developing the asset?

https://vimeo.com/user126234410/review/513745497/e3521e9681

Okay, but just for your info.

Panoro have our EG assets down as 22m reserves.

Let's say that EG production license gets extended to 2045 on "technical potential". I know Panoro states "2050 and Beyond", but for the sake of this argument, let's assume 2045.

Do you know how much potential reserves that is?
I have an estimate at an ADDITIONAL 17m barrels reserves (depending on how much potential). But i've been pretty conservative.

SAY NO TO EG ASSETS.
Potential 39m reserves for $89m? NO THANK YOU.