Member Info for Slift

Canarywharfy mate, it's not as simple as that unfortunately.

As it stands right now, there is a shortfall to meet 2022 bond (But if positive cashflow for YE, no shortfall until March).
I find it amusing how EVERY time you get it wrong with TLW's finances and conditions with RBL.

Stop making a fool of yourself and read up on these three points lol:
- Debt Maturities
- RBL Liquidity Forecast Test
- RBL Net Debt to EBITDAX Gearing Test

From the Half Year Results:
"These plans will be laid out at a Capital Markets Day before the end of the year, following which Management expects to take one or more of the following actions which it believes would be progressed sufficiently by the end of January 2021 to address the forecasted liquidity shortfall in April 2022:
•Evaluate refinancing options for either or both of the Convertible Bonds due in July 2021 and the Senior Notes due in April 2022.
•Seek to agree more beneficial technical and/or economic assumptions with its lenders or to amend the commercial terms of the RBL Facility in order to maintain or increase debt capacity.
•Seek to secure new liquidity from banks or capital markets investors
In parallel, the Directors continue to evaluate strategic opportunities and engage in discussions with third parties with a view to raising material proceeds from portfolio management"

Even if requirements for April 2022 bond is met by January for the RBL, Tullow will not meet the requirements in March without any of the above.

So expect at least one of the above mentioned and discussed in detail at CMD (with likely decision of route they are planning to take) to ensure that the shortfall for 2022 bond is met.

As it stands, and as far as I know:
Breakeven is around $38-40/barrel for this year.
Breakeven is around $48+/barrel for next year.

On a yearly basis, every $5 above breakeven is around $50-55m positive cashflow this year.

Haven't done much calcs, but I think Tullow is looking around $20m positive cashflow by YE20 if Q4 goes well.

ALL IMO. DYOR.
Slift

https://devotedanddivorced.files.wordpress.com/2018/06/glasses-3002608_1920-e1529609572831.jpg

"In all the articles I've read this year, the content is only about the troubles the company are in. "

I think generally, people are just over optimistic about Tullow's future when there are still a lot of work to do before the company is out of trouble.
Turnarounds don't happen in 6 months unfortunately (especially in Tullow's case where defaulting was very close in March).

I'm intrigued regarding the CMD, but there is a high risk for investors if TLW does not convince the RBL on it's plans going forwards to meet the shortfalls.
As the article mentions, it's not an easy task and I personally wouldn't be surprised if there is some sort of cash raise involved, but we will see. There are two things going against Tullow for 2021, that's oil prices and declining production. The looming debt payment therefore needs to be deferred/paid someway or another.

Oil prices:-
Whilst most are optimistic about oil price currently, there is still challenges going forwards, with a lot depending on demand improving and OPEC compliance.
IMO, Tullow would need around $55+/barrel average in 2021 to get through the year comfortably as it stands. $55/barrel seems a long way away in the current depressed environment, even with delay to OPEC cuts.

Production:
Even with Ghana drilling next year, production is likely to be <75k bopd. This will add pressures to cashflows for 2021 at the current oil price.

So it's no surprise that selling the CMD is going to be difficult with the above "known" conditions on Tullow's operations for Y21.

JUST IMO. DYOR.

Good 50/50 risk for investors here on the next trading update.

In the current environment however, other shares come across as better investments..

ETA to trading update?

No big impact here to Tullow here.

Vaalco were the operator of the field. At 7.5% stake to Tullow, any changes Vaalco makes wouldn't have a major impact to CAPEX and OPEX cost to Tullow.

JUST IMO.
Slift

Dickbat,
"I am not going to conversed with you anymore Slift I have nothing to prove you have everything.!! Good luck young man"

Keep conversing with me mate :)

Such a sad story..

I for one will keep using my petrol car beyond 2030 :)

I think it should be noted that the change must come due to the depletion of the oil reserves.
Here's an interesting article: https://www.hellenicshippingnews.com/global-discovered-oil-and-gas-resources-set-to-reach-10-billion-boe-in-2020-russia-in-the-lead/

10 billion resources discovered globally in 2020. At the same time, at approx 92m barrels/day demand --> around 34 billion barrels are consumed in 2020.
Discovery does not replace current consumption and by 2030, if demand is still as high as 92m barrels/day, Saudia Arabia and Russia will be the ones to benefit from this and each year it will only become more difficult for fossil fuels. The price of oil will also rise with the lack of production.

- USA currently biggest producer has 11 years of oil reserves
- Mexico being 12th largest producer has 9 years of oil reserves
- etc.

Discounting Venezuela and Canada where majority of oil is heavy oil, there is approx. 35 years of oil reserves left at current demand.
The middle eastern countries with their huge reserves account for close to 70% of those years.

All to look forward to. JUST IMO.

I see the investors here are still deluded regarding this company.
It's the SAME people over and over again, day in and day out.

JoeSoap makes valid points, so why not take a minute and read to understand it rather than sitting behind rose tinted glasses?

- £66m market cap
- Less than 8m reserves
- Downgraded portfolio
- Very high operating costs ($40/breakeven)
- $230m bond
- Declining production

Amuses how market cap is £66m with those fundamentals.

Estimated net assets at YE at c. $300m
But note from HY results:
"The impairment charge was calculated based on expected future cashflows from the Lancaster EPS, using a number of forecast production profiles (both with and without the cost and benefits of a water injection programme) and probability weighted according to our best estimates of the most likely outcomes. For further details on the impairment charge, key assumptions and methodology used see notes 1.4.1 and 2.3 to the interim financial statements. These estimates and assumptions are subject to risk and uncertainty, and therefore changes to external factors and internal developments and plans (including the sanction or otherwise of any water injection programme, an updated CPR assessment of the Lancaster field, and any other intervening developments) have the ability to significantly impact these projections, which could lead to additional impairments or future reversals in future periods."

Without the factors (i.e. if water injection doesn't work and that the "best estimate" has to revised down), net assets will be c. $150m (or approx $80m if you factor in cost of water injector at $70m).

Oh dear, JUST IMO.

Bad news at Kaieteur. Makes our Orinduik block look better.

https://www.lse.co.uk/rns/WTE/tanager-1-results-gvj3md2rtt67vzk.html

Whilst not much significance to Tullow.. Tanager-1 was a deep well, one of the few to target Santonian and Turonian intervals in the basin.

If there are positive results here following review of data (unlikely it seems from reading that RNS), this could de-risk Tullow's Block 47 Suriname well in Q1.

94.5% Efficacy.

Just a repost:

Next year (2021), Tullow is likely to commit CAPEX to Ghana and will be production focused. The below are pure estimates based on what we can predict and all IMO:
Ghana - c. $200-240m
Kenya - c. $20-40m
Gabon/Non-op - c. $80-100m
Explorations - $50-80m

Giving CAPEX for 2021 to be around $350-460m+ - Likely to be on the lower end but oil price at YE20 will determine this.

The above CAPEX is based on:
Ghana - Jubile South East Phase 1 development (4 wells with 57mmboe estimated ultimate recovery, 2P reserves is likely to be c. 30-35mmboe)
Ghana - Other committed CAPEX including water injectors/commissioning of pump (to increase injection rate to 230k bwpd from 190k bwpd)
Ghana - Enyenra development/completion (TBC, but likely to be in 2022 onwards, not included in CAPEX)
Non-op - Ruche and Ezanga developments and other projects
Kenya - Idle with minimal work focussing on FID for YE2021
Explorations - General license commitments, potential drill in Guyana if oil price allows (est. at $12-15m/drill to Tullow)

In Ghana, there's also the Ntomme West, which Tullow can drill, but likely to be 2022. There are also explorations Tullow are conducting in Ghana to further increase reserves such as Jubilee North East.

Kenya: Tullow are looking to further decrease breakeven costs here in the design of the development. Options available are to reduce heated pipeline length or use another route such as connecting to Uganda. Other ways to reduce breakeven here would be to amend the "foundation phase" such that it is optimised to produce more than 60k bopd. But these are just ideas.. nothing has been revealed regarding Kenya yet.

Non-op portfolio has a lot of development work going into 2021 to maintain and increase productions. With a CAPEX of circa. $100m, Tullow will be able to increase productions here from current 23-24k (22k due to OPEC cuts) to 25-26k+ bopd in 2021.

On the explorations front.. as at Half Year, Tullow has written off Namibia, Comoros, Peru?, and -some- Cote d'Ivoire licenses.
Tullow is waiting on Venus-1 wildcat drill by Total before fully deciding write off of Namibia PEL090 license though. Venus-1 wildcat drill is scheduled for H1 21 (likely to be Q2 21).

Suriname: Waiting for drill here, results to be around March 2021. 2020 CAPEX ringfenced to cover this drill.

Guyana: Potentially 2 drills in Orinduik next year, if CAPEX allows. Approx $20m/drill, but Tullow has license until 2024 before further activity, so can defer.

Cote D'Ivoire (Onshore): Evaluation of seismic operations that was part completed.

Argentina: 3D seismics progressing well.
Peru: Early stages, possibly 3D seismics in new blocks.

Not much else to say tbh. A lot of unknowns as it stands as focus has been on capital structure.

ALL IMO. DYOR.

Well.. if you're going to take up this company, you'd only be deluding yourself.

As it stands, this company is performing poorly.
It may, or may not change on Q4 update. But that's the risk you're going to have to take.

Transformer1977,
Nice misleading post.

Where's "IMO"???
Hypocrite.

Africa Oil posted Q3 results today.

Only mention of Kenya is below:
"To finance its future acquisition, exploration, development and operating costs, including the Kenya development project, Africa Oil may require financing from external sources, including issuance of new shares, issuance of debt or executing working interest farmout or disposition arrangements. There can be no assurance that such financing arrangements will be available to the Company or, if available, that it will be offered on terms acceptable to Africa Oil."

Seems like no-one is giving much out on plans for Kenya until the CMD, but Africa Oil's statement is forward looking in developing the asset.

Information from Q3 Results from Africa Oil today:

"We are now looking forward to the spud of Venus exploration well on Block 2913B, in Namibia's Orange Basin in the first half of 2021, which will target one of the largest submarine fans ever tested by the industry. "

TRP-BPC,

Yes, drilling should complete soon and we should get results very soon. Could be next week, or the week after depending on any delays.

We don't know exactly when bulletwood-1 will be drilled. Depends on when Exxon wants to drill I guess, but supposedly start before year end.

What? Ofc Tanager-1 and Bulletwood-1 matters for ECO.

They are nearby blocks and any oil finds there further increases chances of oil find within the Orinduik block.

And yeah, my bad, meant results*

outofideas,

There's less than 58% owned by instituitions. Wherever you got this figure from (I can guess simply wall street?) is wrong.

Don't forget, instituitions have also lent 8.9+% of their shares to shorters to dump in the market.

So there are in fact majority private investors than instituitional investors. Afterall, not many would invest into a company with a going concern statement which says "there is a chance of defaulting within 5 months".

Just IMO.

Megan,

The problem with Tullow as it stands is that majority of the shares are owned by private investors such as you and me.
And with that.. you get very high volatility and price movements on a daily basis as individuals sells and buys.

When the company is in a more stable position (when Instituitional Investors buy to hold), there'll be less volatility as Instituitional investors do not buy and sell on a daily basis, but rather hold over over a number of months or years.

Fluctuation here without any significant news is a given until majority of the free float shares are taken up by instituitional holders to hold.

JUST IMO.