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it's quite some range, yes but valuation depends on many factors such as oil prices, sentiment etc. From TA view point, for example, it would be consistent if the gap to 130 is closed. I'm not suggesting this will happen any time soon but the stock is detached from fundamentals. Is there any other oil & gas company where mcap is 1/2 the yearly gross profit?
@NSVPatel, from your posts it's evident that you're not a holder, nor looking to buy. Also don't seem to have a short position, so what's keeping you on this board? Genuine question.
I haven't sold a single share in TLW since Jan 2020 and happy to wait for the recovery. I don't regret not selling at around 60p either because when it gets to 60p again it's highly unlikely that I will sell, simply because I don't see it as fair value. Imv, TLW should reach 90-140p if they manage to add extra 10-15kbopd.
Hochschild's vice president for legal and corporate affairs, Jose Augusta Palma hinted that they expect an outcome of the modified EIA in the coming months. This was published on 7 March: https://www.rumbominero.com/peru/hochschild-apuesta-mineria-peruana/
@HappyInvestor100 I think you're confusing the FCF - debt repayment link. TLW's gross profit is more than 2x current mcap (over $1bn) and as Rahul said they're not focusing on making repayments ahead of schedule while there are other good opportunities that would allow Tullow to increase production. In my view, we need to find extra 10-15 kbopd. Why would you rush to buy back the debt and get stuck for ages when you can use the money to develop producing assets that would clear the debt + keep producing for 5-10 years?
definitely not a good time to sell either, at a 52w low! So far has been brutal.
two old friends, PMO and TLW.
it seems that today's drop is way overdone if you take the negative sentiment out of the equation. However, I think the SP can sink even lower, especially if the interest rate goes further up. On +ve sentiment I see the SP returning to 310-330p short term and if the doom & gloom persists than won't be surprised to see 240p.
@maidit308, talking about December 2022, docket 1299: "Debtor-In-Possession Monthly Operating Report"
to me it's worrying that CINE showed a loss for December, at the time when people are going back to cinema. I'm not an accountant and maybe it's just a knock-on effect but if Avatar couldn't propel CINE into profit than we're in serious trouble with a future plan.
the bankruptcy lawyers have cost us $33m as of the end of January, probably close to $50m by now and they are the only ones guaranteed to get their money, regardless of the outcome. :D
well, not everybody likes his plan and if the SP is in a constant downward spiral you have to question the strategy. We already know that Rahul doesn't prioritise debt repayments but if he did the SP would be 90p+ instead of today's pathetic valuation. The market would take it as a positive, broker ratings would be upgraded and also, the media would stop putting "heavily indebted company" next to tullow every time they type something up.
@slater606 it doesn't matter what net profit they have on the balance sheet as they're not paying divi or giving anything away. TLW could have just reinvested 50m right away and showed 0 profit. The lack of commitment to reduce debt is why the SP plunged today.
mcap is less than 1/2 of the yearly gross profit which just shows you how much the SP can be detached from fundamentals. With EPS of ~3p or 9% of the current SP, TLW is one hell of a business. One explanation to such low valuation I have is that the market does not believe that the numbers are sustainable and maybe the negative S&P rating weighs on Tullow.
one thing which is certain is that lawyers will always get their money, regardless of the outcome. :D
forget the equity, it would be much more effective to reduce debt and purchase back some bonds.
Hexam, from 1297, 1298 & 1299 filled in by Nisan at the end of January, he ticked "yes" in pre-petition debt repayments in all 3 forms which suggests that they repaid something in addition to interest. It's confusing because they're putting money from one pocket to the other. For instance, 9m in administrative costs in 1297, is it only UK or group as a whole?
Hexam, My point is that if they're not repaying interest than they must be making profit. If you take away the debt and the likes of Avatar doesn't make you profitable than what will? Could you point me to the docket (on the kroll website??) where they say they're losing $100m per month? (I could only find the forecast from cine they published at the beginning of Ch11)
I'm trying to work out if all operations in Peru will slowly come to a halt, would HOC be able to survive 3-6 months until Mara Rosa comes online? In no way I'm suggesting that it can substitute Inmaculada but we have to consider all options.
@Hexam, if they are not repaying ANY debt during Ch.11 procedures than they must be making some profit. Last year, some big repayments led to liquidity crisis. You can't have your cake and eat it too.
3% up today. Hopefully, we hear good news in the next couple of weeks.