Member Info for Tonyb33

Hi @xxnjr

Many thanks for the distinguishing between Platts Spot Brent and Platts Future Brent.

However over the last 3 days the Platts Future Brent April contract has been rising steadily Fri $112 Monday $115 Tuesday $116.75.

Is this simply moving in line with the rising oil prices or is the Spot price moving away from the Future??

What is it today ?? How is my prediction for $150 a barrel for next week's Cargo looking :-)

This would be good for Tullow in two ways

1. The nature of Iran['s wells is such that they get damaged if shut in. After the tanker wars shut in they lost 30% of production when the wells were reopened

2. Before this happens I would expect Iran to attack Saudi Arabia's East West pipeline and close the Red Sea to force Saudi into shut in to pressure the USA to allow their tankers safe passage.

3. The loss of production from Iran (shut in damage) Iraq (unable to afford well repairs) and Russia (ongoing attacks from Ukraine) should keep prices elevated for a period to allow Tullow to pay off a good portion of its debts to drill more wells to provide a better income multiple on its remaining debt and to restructure its debts from the current penal rates of its new debt agreements

I really would not worry too much about the hedging policy

1. The hedges are calculated on a daily basis the sales on a cargo load basis. To date Trumps tweats have systematically pushed down oil prices. But the Tullow loads have done really well such as the 2nd April load hitting $139 a barrel

2. The hedges consists of three types Floors, collars and three way collars.

3. At these prices floors are irrelevant

4. Tullow's policy was to have a very low percentage of trades in true collars (per H1 2025 projection 3,000 barrels)

5. The vast majority of the hedging was in three way collars where by you lost a maximum of $10 a barrel on an optimum upswing in price. If it hit foe the full $10 loss you would be at least $25-35 above your budgeted oil price.

I agree firstly the USA entered this war with their reserves depleted, whilst Australia had been repeatedly warned about lack of reserves this was ignored and now all the politicians are running around blaming each other. Further we have had the largest release of reserves in history and what little is left will shortly also be released. This plus the damage on wells from shut ins combined with physical damage to production will keep prices elevated for at least two years.

That's without any further damage that will occur if war breaks out on Wednesday. The first thing Iran will do is ensure that Saudi goes into shut in so it will be activating the Houties and closing the Red Sea whilst attacking the East West pipeline

Hi @xxnjr

I use https://www.eia.gov/dnav/pet/hist/rbrted.htm

For historic Platts Spot Brent Prices

For floors if price is above ignore

For Caps if price is above I take difference between cap and actual times number of barrels

For Triple if if price is above cap I take difference but deduct price above call times barrels

All are calculated on a day basis

Values from H1 2025 hedging details ie

Barrels/day Floor Cap Call

Floor 9,500 57.00

Floor/Cap 3,000 57.17 75.67

3 Way 174 57.85 76.30 86.30

Hi @xxnjr

Your Platts Spot brent and ICE futures I think they are the Brent June future contract and not the Platts spot numbers

I use this link

https://www.cmegroup.com/markets/energy/crude-oil/european-dated-brent-swap-futures.html

Hi @xxnjr

The H1 2025 guidance gave hedge values for H1 2026 I have used these hedge values plus Platts Spot daily prices to give gain/loss by day. Now as you have said the H1 2025 figures were a little low but i have now built the model and when we get the new guidance next week i will recalculate. But what the model is showing is that with Trump's price manipulation its depressing the hedge expense.

Barrels/day Floor Cap Call

Puts 9,500.00 57

Hedges 3,000.00 57.17 75.67

3 WAY 174.00 57.85 76.3 86.3

@xxnjr

As always thanks for the clarification

Thanks @xxnjr

That was my point the hedges are calculated on a daily valuation basis. With old Donald constantly attempting to depress the oil price there are a lot of days when the trigger price on the hedge (and therefore expense) is depressed such as over the last weekend.

Where as the cargo price is the price over the actual 5 day window of cargo loading. As such with the state of the physical market I calculate for jubilee for the months of

Jan Cargo price $66.91 no direct hedge cost

Feb Cargo price $71.28 no direct hedge cost

Mar Cargo price (as at 02/04/26) $139 March hedge based on H1 2025 hedge values $2,679,013

Now those hedge values will probably change on the H2 results next week I will put them in the model. But what happened was that in March Platts Spot Brent opened at 1/3/26 ay $71.32 it did not get above $100 until 12/03/26 its maximum was 31/03/26 at $126.69 but because on the quarter dates Ghana gets the second load in the month Tullow did not get their March cargo until 02/04/26 with an average value of $139.

I calculate the next Tullow cargo will be around 30/04/26 the reality is this month we have been continuously told the war is over hence the depressed daily oil price during the month of April but guess what the war is still on and Donald tells us the shooting starts on Wednesday chances are he will TACO and the Iranians will show up late to ask for a continuance of the ceasefire for another 2 weeks. But by end of April oil stocks will be dropping and Platt Spot will be a lot higher than todays $115.00 a barrel again my guess $150.

It may be just me seeing a patten here. A few years ago Trump was ridiculed in meetings with European heads of state when he told them it was inconsistent running NATO to protect Europe from Russia whilst creating a dependency on Russia fossil fuels when Europe would be better off using more expensive US LNG. Currently the Russian German pipeline has been destroyed and the Russian oil ports are on fire

Now the Gulf is in flames and there is a line of tankers from China to the Gulf of America to pick up US oil and gas.

Is this a coincidence??

If you think about it, its very strange. The Market rate of the notes is 96.67 so you can buy the notes in the market then sell them to Tullow and get 100% plus 5% interest on 23rd April 2026. This means the offer is going to be accepted. This also means that Tullow will be saving an additional $15m pa on going under its restructuring plan. That's $50m no maintenance this year, $50m Uganda commission and now a further $15m of interest savings.

I think Tullow will get at least 2 more $100-$150 a barrel loads which means another $200m shaved off their debt pile this year

The question is the original Senior Note refinancing agreement makes provision on the refinancing in May to pay of $100m of the senior notes that mature on the 15/05/26. The key question is, is this the $100m under the original refinancing agreement or is it an additional $100m??

On 15/05/26 when the notes are rolled into the new financing agreement an additional $100m will be cleared. The notice makes for $100m plus $5m YTD interest. This is interesting because the refinancing plan agreed to roll all accrued senior note interest into the capital of the new senior notes then immediately settle $100m of the capital of the new notes.

The fact that this notice is paying early and includes the interest as well is indicative that this is an additional $100m redemption.

I think Tullow have seen my estimate of $150 a barrel on their 28th April 2026 cargo and have spare money to burn.

Note that the market value of these senior notes is 96.67% up from 69% in February 2026 on $1.2 bn of notes they have appreciated by $332m in two months. That's an obligation held by a company currently with a capital value of less than £190m

With all the focus on the Strait no one seems to notice that Russian oil which is 10.50% of the world's oil supply is systematically being destroyed by Ukraine. Last night the oil port of Tuapse was destroyed last week Ust Luga.

https://www.zerohedge.com/energy/russias-tuapse-refinery-attacked-2nd-time-days-while-battling-oil-spill-black-sea

Things are getting so bad that Russia cannot refine or export its oil and storage is getting full. Such is the nature of the Russian wells is they get shut in they will not open without the assistance of western oil services companies which are currently embargoed.

Meanwhile Iran is facing immanent shut in of its own wells. The last time this happened they lost 30% of production when they reopened them.

Iran has also threatened that if they cannot export oil they will close the Red Sea which would result in Saudi Arabia shutting in its last 7mbpd of production.

Actually Spot Brent now $114.90 this morning

I saw Platts Spot Brent at $112 yesterday. I cannot see any new physical oil hitting the market in the next week but I can certainly see it being drained. Why do you think spot Brent is going to drop??

You should talk to my ex wife :-(

I am a Tony but not a Tornado I am more a zephyr

Hi @xxnjr

Looking at TEN cargos I note the last two on the Ghana Website

15 April 2025

28 August 2025

Thats a 4.5 month gap between cargoes. I noticed in 2024 towards the year end there were two back to back Tullow cargoes do you have any dates/prices for Tullow 2026 cargoes. When do you think Ghana will print the updated schedule??

I calculate that this is the Tullow load. It will be interesting to see how quickly it gets filled as hopefully the new well J75P should now be producing. I see Platts spot dated Brent currently at $112. Hopefully this should start rising up until the end of month when the load price will be booked. I am hoping on at least $150 a barrel

To me the key issue is the USD fiscal deficit.

PMs and oil are all USD debasement trades.

The reality is the USA has a $150 + trillion Social security and medicare obligation that costs around $3.6 trillion (and thats whilst emptying the social security fund by $1t pa. Its got about 4 years left in that fund.

Its got a $39 trillion interest bearing fund on which it is paying $1.2trillion in interest. However in the belief that interest rates are falling its been booking a lot of debt at the very short end of the yield curve. A lot of the long term debt booked when interest rates were near zero is now falling due and being rebooked at 5%.

The USA collects around $5.4 trillion in tax hence it has to borrow $2 trillion annually of fresh money simply to pay its bills. In essence its tax take barely covers its debt obligation and all current spending including defence comes out of new debt.

Treasury bond interest is a function of risk. Over the next 3 year we will hit a doom loop as long term debt holders will realise that on current projections by the time they come to be paid the interest on treasury bonds will exceed taxes collected. They will demand higher interest rates by not funding debt. As such the Fed will be force into QE to buy its own debt which will reprice hard assets Gold Silver and Oil. In addition Tullow's USD denominated debt will melt away as the value of the USD is undermined.

All we need is a few more months of $100+ oil to build Tullow's cash reserves and to retire a few hundred million of their high interest junior debt. With the state of the current market we are going to be there within weeks