Member Info for Tacotaco

Expecting a dead cat bounce in the short term tho.... after that it’s all up to the management...

Pokerchips... yes and the viability is reflected in the share price ... until the next RNS of course and only if tlw comes up with a credible to continue with It’s debt repayment and low cost production.

E_AL liquidity headroom from debt is not a comfort quite the opposite... unfortunately it’s the only source of capital available.
This would be good when a company is expanding not contracting

The issue NOW with tullow is is that will it be able to continue paying down debt with 30% less production going forward and potentially higher Cost of Production because of the new field problems??
Overdone or not ... that's arguable but the previously strong market cap compared to peers was on the basis that the company could generate enough Free Cash Flow from 90k-100k LOW Cost production to pay down debt.
Now this investment case has been thrown out of the window with 1 RNS calling into question the viability of the company... the bloodbath is kinda justified looking things this way...
Next RNS will be crucial.

The issue NOW with tullow is is that will it be able to continue paying down debt with 30% less production going forward and potentially higher Cost of Production because of the new field problems??
Overdone or not ... that's arguable but the previously strong market cap compared to peers was on the basis that the company could generate enough Free Cash Flow from 90k-100k LOW Cost production to pay down debt.
Now this investment case has been thrown out of the window with 1 RNS calling into question the viability of the company... the bloodbath is kinda justified looking things this way...
Next RNS will be crucial.

This can go even lower if TLW revises its reserves down and takes impairments... Remeber GENEL Energy ... they had production issue then took $1bn impairments now produce less than half of what they used to a few years ago...
The good news is that the SP recovered from 50p to c. £2 but far shot from £10 pre crisis..

Definitely overdone... but the reason it is overdome is coz management is doing a great slowly slowly killing confidence with 1 bad news after the other in such short time period... Just spit it out in 1 go!!
When confiedence is shattered, SP recovery is difficult!!
Better come up with a major positive news in February 2020 to bring back confidence.

Just a quick shale overview
Shale Gas equities are priced to bankruptcy look at Chesapeake, Sandridge, Range Resources
Shale Oil equities trading at 2016 lows but far from bankruptcy (EOG, Continental, occidental, Pioneer et al)... so will take a while for the bust... but growth decelartion is accelerating and production declines are guarantees in the years to come.

Find the whole thing a bit shady... hope it does bite genl in the future ...

Hi guys,
I’m trying to understand who East Africa Resource Group are and why they sold their 25% stake.
Anyone has a clue?
Thanks

Not sure if this is a serious question but anyhow it’s not up to Tony Durant ... I’ve mentioned in my previous messages that it’s up to the stakeholders...
Secondly I’ve already mentioned the price range $70-80 but consistently... this means it should be coupled with positive sentiment across the sector.

Auson
I still don't understand where you're getting at. I just gave you my investment case anyahow...
TLW is not the only deal ive worked on. I’ve also worked on PMO which we exited in Oct 2018... dont you think we did our due diligence on each of their projects during the 5 years we’ve held on our PMO investment? Don’t rely on google searches to determine whats shallow and whats deep.
With regards to API please let me understand how you make an investment decision based on API? To be really honest I don’t think you really have any idea about API nevertheless you can ask any investor including yourself whether they've looked at API before making a decision on whether or not to buy into RKH or any other Oilie... only after answering that question would you be able to determine whether API matters or not...
Also please let me know how joining 2 weeks ago matters...
All this very respectfully so.

...POO needs to trade at least in the $70-80 range consistently before stakeholders are ready to sanction this... Investors are still staying away from Deep Water E&Ps and no one wants to sell its high cost production when POO is barely holding at $60ish.
This is going no where anytime soon... So if you have patience, its a good time to start accummulating ... starting look cheap...

17% based on my average price... modesty set aside of course... haha

...this has probably been one of the best investment decisions of my life...
Good assets in crappy political envireonment always work...

Auson
I’m sorry but I think you’re confusing with someone else... I’ve never mentioned anything about sulphur...
what is the investment case you are making with APIs and sulphur.... they might matter for some people but I genuinely don’t understand how this impacts investment decision in sea lion or OCTP... could u let me know if I’m missing anything here?

Auson No... as long as Vitol are happy to offtake the oil im happy with the project... PS: they are contractually binded to do so...
This is the main reason for an investment case and not API ...
Could you please let me know what the point in all these technical questions? how will they help you in making an investment case.

Auson what are you suggesting and what are you trying to get to... ?
I think you are oversimplifying things... unfortunately i dont have answer to your technichal question as im no engineer and i also wouldnt wanna just google and throw the first number that show up in my search to justify my point.
My opinion is mainly based on info i gather directly from stakeholders with skin in the game.
Anyhow you do know that Diamond Offshore only does deepwater right? you've kind of mentioned it in a previous comment...
OCTP is right of the Coast of Ghana... Sea Lions in the middle of nowhere... We've sanctionned billions for dollars in Ghana and all based on Low cost, shallow waters drilling ... we do not touch deepwater... i really hope we haven't messed up royally!
Sorry if i sound harsh

Mrd... Reserves dont matter if you cant make a profit bringing the stuff out.
Auson... no idea about depth all i know is that all ghana offshore drilling is in shallow waters

I worked on OCTP project in 2016 when we sanctioned it. Mainly reason why banks were on board was because:
- Ghana offshore is shallow water much lower cost than deep water. (i remember our model showing repayment of our loan at $16bbp in downside case scenario).
- if it werent for vitol pumping in equity this would probably not have been sanctioned; Vitol has enormous leverage over lenders , they are also offtakers under the deal and the primary source of repayment of the loan.
- i can assure you if it werent for Vitol we wouldn't have sanctionned this and UKEF would not have participated in this on its own.

It takes more than 1 party to get complex projects sanctionned... FPSO builders dont carte about Oil price they just wanna secure long term leases, banks and equity holders do and for that reasons if the price is not right they would not jump into it. $60/bbl is not sufficient to sanction this especially in an environment companies are have massively cut down on CAPEX and focusing of returning cash to shareholder... look at Shell, planning on paying $15bn in dividend and $10bn in share buyback while keeping CAPEX at around 20bn down from 40bn in 2013... this is industry wide trend and the money aint there for now.