Member Info for Slift

That's not a SHARE PRICE prediction.

That's a blue or red prediction and clearly meant as a joke.
"for all shares but HUR" is a joke of comment to make.
ALL SHARES?

You're naive, you shouldn't be investing if you invest based on what is posted here.

Oh and just for you:
IMO.

Transformer1977,

I have never once predicted HUR's Share Price on a daily basis.
But keep on ramping without any substance behind it :)

OH, and all my posts are IMO.

lol this comment from Moody's though:
"and the limited hedging book in 2022 with only 3% or production hedged so far at $50/bbl specific to Tullow Oil. "

1. Why would Tullow or anyone else hedge for 2022 in the current environment at very low prices?
2. Some producers have barely got anything hedged for 2021.. how many have 2022 hedged?!
3. There's still 13 months to secure good hedging for 2022...

I'm sure my short position (never shorted before but okay let's go with it) is as good as your long position from c. 6.8p when you believed that there is a "fair bit of upsides potential in the long run".

No offence to other LTH.

Out of thin air would be my guess.

Fundamentals do not speak it.

https://www.argusmedia.com/en/news/2155801-libyan-crude-output-rises-to-830000-bd

Not that it matters much.
I think Supply <= Demand at the moment thanks to China, US and India.

Also, production from the gulf of mexico isn't back up to full production yet. Approx 500k barrels/day still shut in as of today.

Expecting nice draws in crude in the EIA report :)

took*

I wasn't expecting a downgrade on this review but timing indeed sucks and the outlook on oil (and the fall in oil price) didn't help the rating.

Both S&P and Moodys' both take into account the $500m proceeds from Uganda.

But in terms of January RBL, the liquidity test is a hit or miss in terms of Moody's forecasts/models.
Several things that Moodys' haven't factored in their forecast:
- $75m on Uganda FID
- Cashflow for H2 following cost cuts.

With a breakeven FCF for Y20 (i.e. $0 as per Tullow's guidelines) and assuming no unforeseen costs in H2, Tullow should just be able to make the liquidity test with (+/- $10m excess/shortfall). But very uncertain.
With the Uganda FID payment, Tullow will have enough headroom to pass the liquidity test.

If Uganda FID doesn't occur by YE20, Tullow would have to convince the lenders at the RBL that this cash will be available at the point where they face the shortfall (Jul 2022).

Moody's expectations of production of 65-70k bopd for Y21 and Y22 is concerning. I don't think Tullow will be able to achieve above 75k production for Y21, but somewhere around 70-75k bopd should be a manageable amount and hopefully drilling in Ghana helps.

One key area where Moodys (and S&P) aren't happy with Tullow's finances is debt to EBITDA ratio. This ratio is directly linked to oil price. Tullow needs much higher oil price to achieve a higher EBITDA, and with impairments to assets this year, depreciation is less too - thus reducing EBITDA.
I think total debt to EBITDA for S&P ratings were 6.0x, and likely the same for Moodys'. This is the "S&P adjusted or Moodys' adjusted" ratio taking into account yearly liabilities aswell as total borrowings. (For 6.0x, total debt in their adjusted ratio is approx. $4.5b).

So unless oil price significantly rises, and Tullow recovers impairments to assets... this ratio will be very hard to reduce by Tullow (due to forecasted declining production rates) and is majorly depended upon oil price.

Nonetheless, I'm still hopeful on oil price.

GLA. DYOR.

CaptainSwag,

Yeah, i'm not expecting much on the forward work programme until december.
I think HUR should provide an update on current production, but we'll see!

CaptainSwag,

It would be money wasted if they don't have a plan. They must be pretty confident in their plan going forwards. I wonder if it's something to do with Lincoln?
I.e. they need to debottleneck AM to be able to increase production from both Lancaster and Lincoln.. especially if Watercuts are going to be high.

Either way, we should get an operational update sometime this week or early next. HUR usually updates the market on a monthly basis - or have done for the past few months.

GLA.

https://www.energyvoice.com/oilandgas/north-sea/273841/bluewater-north-sea-fpsos-modifications/

"Global E&C has committed to providing its services for an initial three years, with two one-year extensions included in the deal, the value of which was not disclosed."

Hmm.. an initial period of 3 years... I suppose that would mean that HUR will have AM for another 3 years+?

The UK was practically in lockdown before this announcement anyway with T2 and T3.

Not much of a change.
Either way, any drops in oil price should be good for oil. Take out more shale going into 2021.

For HUR, 1.8m barrels hedged @ $35/barrel.

f15jcm,

I don't think so, in the region where HMI are operating at, I can imagine there's a lot of competition. It's hard to get new clients, but easy to maintain and resell to them - especially big clients that would order in large quantities.

Which is why I think that maybe COVID MAY help out by taking out some of the competitors during this period. And when economy does start to recovery, maybe HMI are able to secure the contracts that were lost by their competitors?

Anyways, I'm going to follow their performance. Any improvement in sales in Q4 2020 may provide some confidence or outlook for positive cashflow in 2021.
We'll see!

ALL IMO. GLA.

I don't think that they should cut prices.
Why should they?

HMI knows and believes that their product is good in providing farmers with a good yield and better product. Cutting prices will just dent this belief. With positive test results, there is no need to cut prices.

The mine is situated in the biggest and fastest growing agricultural region in Brazil (and world). So ofcourse they are going to sell the most in this "local" region. But there is potential for countrywide and worldwide if they do end up acquiring good contracts.

There are sure to be big players within this "local region" that export raw ingredients (for coffee, soybean, sugar etc.) worldwide. But it's possible that these big players also have sites elsewhere. That's what it means to acquire a big contract with a big client.

Anyways, HMI's customer base is slowly building (even if it's smaller players). If their product is as good as they say, the current clients will be returning next year whilst the company secures new contracts, growing the business post COVID.

But until it's big enough to produce positive cashflows, investors are going to be tapped into for liquidity in future years. If Q4 sales is greater than expected, then it should be a positive step forward. But I don't think this will really take off until the economy starts recovering and there is stronger demand for products.

JUST IMO. GLA.
Slift

Try using the filter option.

bucklerfern,

Not really, maybe just certain individuals on this board for being so toxic and misleading people.
I too have lost money here from the drop after tech review - although to invest was my own decision so no blame.

But ofcourse i'm going to defend myself from the toxicity and attacks here.

bopd,

I've been pretty impartial with my analysis.
I don't have any position here, but will invest when I feel there is value or potential here - which is why i'm following the company.

Covid as for an excuse, you're right. It's the loss in distribution/sales contracts that have impacted this company.
It's not an easy task to gain recurring clients that will buy the product - especially major ones. This is the problem that this company is facing.
Once they have a contract with a major customer/client with multiple sites in both countrywide and worldwide.. that's where the real sales will come from.

I suppose in a way, the fact that covid has happened MAY help this company in securing these contracts when the economy starts recovering.

For any company, cash is king at the moment. But here at HMI, they are using available cash to build storage, expand site and acquire mining licenses when NOT REQUIRED. Especially when they are actually losing money with operations with negative cashflows.

They could have done this for the same price when it's required after there is demand for KPFertil.. It just seem like a big waste of cash atm.

Like I previously mentioned, they have two ways to improve accounting so that they "make a profit" this year:
1. Expanded site --> Adds value to asset so that added value is essentially "profit" on an overall accounting basis
2. Stock up with inventory within expanded storage facilities --> Again inventory adds value to current assets so this can be seen as "profit" on an overall accoutning basis..

But in reality, they really need to improve sales, and the best way to do that is to get recurring BIG CLIENTS that will use the product both countrywide on multiple sites and worldwide.
It seems as if they are simply targetting the smaller farmers at the moment.

JUST IMO. GLA.
Slift

Whilst it's not an upgrade to the rating, it's certainly promising that the rating will not be downgraded further.

I am hopeful that Moody's will upgrade from B3, but outlook also depends on sector and oil price.
Given that Tullow isn't quite out of the woods yet with capital structure and debt, anything but a downgrade in the current environment is a positive result.

Also, Q3 Trading Update will be issued/combined with Capital Markets Day on 25th.
Either way, Q3 production as posted by Ghana is in line with guidance.

GLA.

Tuxedo8,

If you really invest based on what is said here, then I think you need to review your investment strategy.

You are trying to make out as if I can predict the future.
I clearly meant my post as a joke with regards to blue friday for all but HUR.

My response was in regards to this comment I made:
"Tell you what, I'll stop posting here forever if HUR is most blue tomorrow (without an RNS)."

So if anything, you're the biggest fool here for ttating that HUR "will be more blue than most of it's oil peers".

Now go enjoy your weekend.

Nice one Nickel.

Tullow's credit rating has been revised by Standard and Poor, as below:
https://gyazo.com/d283f3857aadb0e682542ba0d4f62969

GLA.