Member Info for Slift

At a pure guess, I'd say Tullow will have to raise approx. $200-300m somehow between now and April.

Hard to say without RBL, but just a pure guess.

And did Jubileey sell you one of their rose-tinted glasses for you to make that statement stuartv?

"Adrianuk
Posts: 1,499
Price: 28.32
No Opinion
RE: downside risk?Today 21:09
Are you not concerned about Negative Shareholders equity?"

Are you not concerned about the significant dilution to shareholders and/or bankruptcy here that could lead to shareholder wipeout?

markaskew83,

Why risk it here?
There are better opportunities elsewhere.
Personally believe even 2.4p at this moment is expensive for this company - simply supported by well flowrate, but this is diminishing everyday!

Agree YoungEngineer.

There is a potential for D4E swap to refinance.
However, i'm not too sure about significant dilution such that shareholders are left with 10%. This is ridiculous as this assumes c. 12.75b shares to be issued in D4E (At 20p/share, this would be $3.5b). This 10% figure is probably from March 2020 when share price plumeted to 7-8p.
Tullow are still able to farmdown/sell exploration assets and/or do a rights issue to raise some cash to cover.

Whatever way they raise cash, it'll be a rollercoaster for shareholders. This has once again become a high risk share IMO.

Correction.
"Cashflow from operations projection for 2021: $70-100m"

Approx. $60-80m FCF at $50/barrel and 63k bopd

Takeaways
- Production guidance less than previously expected (down from 64-67k)
- Cashflow and breakeven is constant due to reduced CAPEX (CAPEX down from $325m at CMD to $265m)
- Delays to calm buoy offloading commissioning
- Delay in decommissioning activities

RBL as expected in FEBRUARY. The delay is potentially due to the shortfall in liquidity. No biggie, but also as expected - refinance will not be fully approved and completed until end of going concern period (March-April).

Cashflow from operations projection for 2021: $70-100m
Additional cashflow ($75m from Uganda): $75m
Breakeven: $47-48 ($45/barrel with hedges)

OVERALL - Everything as expected and posted as before, except the takeaways listed.

2020?

That's hilarious Jubileey.

Didn't you also say not long ago that production guidance would be upwards of 75k?

From memory:
Estimated FCF 2021 c. $70-100m at $50/barrel.

At $55, would be about $200m

- chance of plug damaging well?
- are you going to spend another c. $15m on a rig to plug the first leg when it starts producing more water?
- Interference?
- etc.

CLEVER.

Either Chrysaor or Hurricane.

"this is doable"
Yeah, let's stop a working well and risk sidetracking it and if it fails, let's say goodbye to shareholders monies!

"Water injector to me seems foolhardy"
Let's not worry about bubble point and pretend that each time a new well is drilled the bhp is replenished!

There is one thing that i'm not sure on.

It was previously reported that HUR were looking for a rig for a campaign that would potentially last between 95-120 days.

Whether they have changed campaign days since or not, who knows.

"obvious" because:

- Petrofac knows the site and was involved in previous well drills
- Rig suitable for operation
- UKCS drill
- 76 days drill sounds about right (start in July, end in Q4)
- semi submersible is cheap enough for HUR operation (similar to Lloyd B. Jr).
- No other KNOWN operators that could fit the bill.

but then again..
could be sold off to big fish for the same stakeholders to benefit 10-100% of their initial investment and PI's wouldn't be able to stop them with the 20%.

Paying approx. $450-500m (equity + cash + bond + cash raised for FWP) in a takeover seems expensive for HUR though. Not sure who'd be willing to pay that when there are other opportunities that provide more value (i.e. BP assets).

Capt,
"the worry is that the dilution precedes a "sell off" to a big fish......"

Doubt that HUR will be sold if diluted.
With dilution, the biggest shareholders (stakeholders) benefit from any turnaround that could happen. The people willing to fund this forward work programme. They will receive shares equivalent to amount funded.

If dilution was to take place, the biggest shareholders (those who funded FWP) will have 70-80% of the total shares, so any takeover is highly unlikely unless came from biggest shareholders themselves due to shareholder approval.
PI's here will be left holding nothing.

Mr Maris has an answer!

1- Take the job as a first time CEO of a failing company (HUR)
2- Dilute shareholders to maintain position for 12+ months with cash raised
3- Resign and take a new role as CEO (of a company in better health)
4- Repeat step 2

Share price continues to slide.

Nothing new here, and another month closer to dilution.

Planted, how's your truck bro?

Skystocker,

https://www.lse.co.uk/rns/HUR/operational-update-zhgaudwlurxuhpc.html

Lincoln well due to be P&A'd in June 2021.
Unless OGA sanctions tie-back to AM between now and then.