Member Info for steward1

A very crude calculation is that if Rahul expects 60K bopd at $50 and he gets $60 then he's got extra income of $0.22 billion without any additional costs compared to CMD/Trading Statement. Quarter of a billion is healthy headroom.
My only concern is that Rahul might want a complete re-set and he does a D4E/RI to reduce debt further... I don't think that's off the table but, if he goes down that route, he's in a much stronger position to negotiate a decent deal.

bullmarket - I'd suggest that Rahul's strategy is very conservative both in terms of poo and level of production but doubt if you'd accept that. He clearly is setting the conditions to outperform in the years ahead. The poo is the driver here - he'll reduce debt quicker than anyone expects and he'll increase production quicker than anyone expects. That $7 billion could be generated way ahead of time... he could have an extra $200-250 million to play with in this year alone!

Good try bullmarket - try and create some doubt about the integrity of the CMD!

If you're taking the trading statement at face value - what poo is that based on and what is the poo today? Let me help you...

"Underlying operating cash flow1 is expected to be c.$0.5 billion at $50/bbl for the first year of Tullow's new business plan which aims to deliver c.$7 billion underlying operating cash flow over the next 10 years; 2021 pre-financing cash flow is expected to be c.$0.2 billion at $50/bbl2."

poo today - circa $60!

bullmarket - read the CMD!

It's all heading in the right direction... might not suit your position but TLW is turning around.

In terms of the SP, TLW has been priced to fail... and for the lenders to take it from shareholders. The CMD presented a reasonable plan to recover (pay off debt, etc) with a poo of $45. The drop in production is disappointing (it was signalled in Nov... it shouldn't have been a shock in Jan!) but it is/was part of the plan presented. A doubt around the RBL was valid with the poo staying at or below $45. The general view now is that the poo will stabilise between $60 and $70 with scope to go higher.
First point is that TLW is not going to be handed over to lenders.
Second point is that the current poo allows TLW to pay down debt much more quickly.
Third point is that if the poo stays at this level, Rahul and team can not only pay down debt at a faster rate but they have the option to increase investment and increase production.
I fully agree that if the operation is duff then the poo is neither here nor there BUT Rahul has sorted this out and, therefore, the benefits from the increasing poo will be realised.
I'd suggest that the answer to the question of why the SP hasn't moved up lies in the fact that the RBL hasn't been completed and shorters have been able to create so much doubt and uncertainty. We've got 15 trading days at the most to get the RBL... be patient, stay the course, don't sell!

Could be that they're hoping for the poo to reverse... world economy is waking up with every jab... poo at the very least should stabilise ($60-$70?)... I can't see it falling back.
Or they're hoping that the RBL creates issues for TLW... pretty sure that Rahul and the team are all over this and are covering all the bases.
The difficulty that shorters have is to start their exits without the sp lifting off.

I was thinking out loud... D4E isn't going to happen. All the signals are positive. Be good to see more shorters close their positions.

I have wondered if Rahul would be tempted to go for a RI or even a partial D4E... takes the pressure off the mgt team to some extent and might allow them to accelerate production back up. However, I can't see holders voting for that in the current environment with the poo recovering so strongly and low borrowing costs. I think shorters have been betting on a catastrophic collapse which isn't going to happen. I wouldn't be surprised if Rahul & co are rewriting the CMD presentation to increase investment and bring forward production increases to 2021.

Sageman - hope you don't mind me pointing out that the reduction in bopd was signalled in the CMD presentation in November. It wasn't a shock in January but some used it to create a bit of panic selling. The message to hold on to our shares is so important.
I imagine that shorters have been scrambling to keep the sp down for the last couple of months - they seem to have succeeded in January but momentum will continue to move the sp up before the RBL signals lift-off.

Yesterday's news!

Agree Sageman - TLW signalled a reduction of BOPD at the CMD... it shouldn't have been a surprise to anyone when the update was issued last month. I get some confidence that they accommodated the lower production in the CMD which surely forms the basis of the RBL. At least $10 difference in the POO now... looking very positive!
Any difficulty in the RBL and we should all be crying "Foul"!!

And some predictions that it will go further and settle between $60 and $70 in the next year.
We just have to be patient and wait for the RBL. If the mgt team have done their job properly then the CMD position would have been good enough to avoid anything drastic coming out of the RBL. The early RBL was made at the request of TLW so that adds to my confidence - the extension is probably a combination of factors (increased POO, lockdown challenges, impact of vaccine on economies, perhaps another asset sale... the world is a different place even compared to November) none of which I see as major.
My take on the CMD was that they were conservative on both production and on POO, which has comfortably sat above $50 for almost 2 months and above $55 for almost a month.
It's all looking good IMHO.

I think everyone is forgetting this press release from only a few months ago -

"7 October 2020 – Tullow Oil plc (Tullow) is pleased to announce that it has completed the bi-annual redetermination of its RBL credit facility with $1.8 billion of debt capacity approved by the lending syndicate. As a result, the Group retains c.$500 million liquidity headroom of undrawn facilities and free cash at the start of the fourth quarter of the year, which the Board deems appropriate given Tullow’s capital commitments.

At Tullow’s request, the next redetermination will commence following Tullow’s Capital Markets Day, which is scheduled for 25 November 2020, and is expected to be completed in January 2021."

The position that TLW is in now compared to then is vastly different... in a real good way... and, yet, some are suggesting that things are so bad that they need to do a RI or D4E. My own view is that the RBL has been delayed for wholly positive reasons.

Trying to work out what's going on today....
Could be that shorters are playing games?
Could be that the production figures are really disappointing?
Could be that the market sees a D4E is coming (esp with the delay in RBL)?

Very interesting what's happening with Gameshop. Seems to be an action against shorting. I've got issues with the principle of shorting... would be good to see shorting as a trading strategy disappear!

It's all heading in the right direction - POO is a major boost. 2 months ago assuming $45 and now assuming $50. I reckon TLW holding out for better terms on RBL due to POO... wouldn't you?

And next month, sentiment should be even better as vaccines continue to roll-out and the world recovers.

It's looking pretty good.

Looking forward to this week - environment seems to have improved significantly for TLW since the lows of last March and even since the CMD on 25/11/20. Who would have thought that the poo would be sitting above $55?

The sp hasn't followed the same trajectory as poo since the CMD which is puzzling but, then again, there are some big short positions to be factored in.

As long as the trading update has no big shocks, it should be onwards and upwards. As mentioned previously, it seems that the mgt have taken a very cautious approach to their projections.

Yes, patience is the key... I reckon the major shorters will continue to reduce their positions over the next few weeks ahead of the update near the end of the month and am assuming that they're doing what they can to keep a lid on the sp. The pressure is building though and this could pop at any time. I'd settle for for POO to stay high (Saudi certainly want it at this level at least), production to be steady and some movement on reducing debt. For me, the TLW mgt presented a cautious/conservative plan at the CMD. The major economies suffering from the pandemic will begin to wake up in the next few months as the vaccines are rolled out... TLW is looking good for a journey north!

Haven't posted for ages and then my post gets removed!!
So, if you're new here, check out the history of GR's performance - full of promises and zero delivery. The sp has spiked with no real news following today... check out if this has happened before and how many times. Check out RNS's and what has followed. There's a very good reason why the sp is where it is compared to the assets and potential.

Rule 1 for new CEO's - under-promise and over-deliver. I expect the 75kbopd to be quite conservative and, as you've illustrated with your other figures, we should see a significant increase in the sp.
If you were to combine a sustained increase in poo with an increase in production plus a reduction in finance costs, we could see a significant multi-bagger!