Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
The obsession with hedging on this board is second only to the obsession with shorters.
Hedging is a prudent part of normal risk management for any commodity producer, some companies having an average of 50% of future output hedged at any time. The problem with some of TLWs hedges was that they had relatively low ceilings compared to the recently elevated oil price. Many of those hedges have fallen away, but it would only be a company with a very strong balance sheet and a huge risk appetite that would not maintain some hedging.
https://oilprice.com/Energy/Crude-Oil/Underhedged-Oil-Producers-Heavily-Exposed-To-Low-Oil-Prices.html
Yesterday TLW dropped to the downward sloping trendline in place from Mar 2022 to Jul 2023, and has since bounced up 11%, to leave us down 5% from yesterdays open.
SP is above 50 & 100 day EMA, and just under 20 day EMA.
The upward trend begun in May is still very much intact.
There are no reports of violence or injuries, instead people cheering in the street. This is a significant improvement from the post-election norm.
From Sky news today:
"Every vote held in Gabon since the country's return to a multi-party system in 1990 has ended in violence. "
The military don't have the expertise to run the oil companies, and will need to keep the oil flowing in order to pay themselves, so current players will stay in position. The government "share" will just be going to different bank accounts.
Up 70% since May
Above 20, 50 & 100 day EMA
Broken out of downtrend on 25th of last month that had been in place since Mar 2022
More bullish long green candles than bearish red ones since May 17
Currently around the highest price it's been for 8 months
Last month was strongest monthly performance since Sep 2021
It's looking extremely positive
It's just a natural pullback, to be expected after the recent bull run. Most likely won't drop quite to $76 before resuming normal service. TLW is following suit, after it's own bull run. Next leg up coming soon.
Proactive investors article
Can someone please explain what the low cost of equity means relative to the cost of secured debt and how this could make any sense.
"Tullow Oil PLC's (LSE:TLW) best course of action is to issue equity now given its low cost of equity, according to analysts at Stifel.
The broker notes Tullow needs to restructure and/or refinance its current c.US$2.1 billion bond debt maturing between March 2025 (c.US$630 million) and May 2026 (currently c.US$1.5 billion), plus a US$500 million bank facility expiring November 2024.
“Surprisingly, we find Tullow is in the unusual position of having a cost of equity below its current market cost of secured debt; we therefore conclude that Tullow's best course of action is to issue equity now,” Stifel said.
It reckons a fund raising of around US$150 million now would currently be the cheaper finance option and may lead to reduced cost of debt as well, and build financial resilience given commodity price volatility and uncertainty over the tax dispute with Ghana.
The broker has moved its price target to 39p and retains a hold rating while shares in the firm fell 3.1% to 37.04p."
Stifel appear to have an agenda, helped by Investor.com posting of the story below riddled with errors.
1. "Tullow Oil's stock price closed at $38.20." I wish!!!
2. fair value $0.55 is a "a downside of -43.46%" from $38.20. Who's doing their math!!!
3. "from a prior price target of %currency%%price%." That was an interesting number indeed.
Note no mention of 70% rise since May.
Article
"An analyst from Stifel maintained Tullow Oil (LON: TLW ) at 'hold' with a price target of GBP0.39 from a prior price target of %currency%%price%.
Prior to this rating, Tullow Oil had 5 buy ratings, 2 hold ratings, and 2 sell ratings.
For consensus analyst estimates and price targets on Tullow Oil, click here. For more news on Tullow Oil, click here.
Tullow Oil's stock price closed at $38.20. They are up 11.96% in the last month and down -24.77% in the last 12 months.
According to Investing Pro, Tullow Oil's fair value is $0.55, a downside of -43.46%. Tullow Oil's fair value comes with a high degree of uncertainty, according to InvestingPro.
Check out Tullow Oil's recent earnings performance and financials here."