Member Info for Tonyb33

Interesting article @Scaffman

Tullows next cargo is due to ship 1st week May. The Iranians will stall, by May Spot Brent will be a lot higher maybe $150-200. By then Europe will be desperate and Ghana is only 12 days steaming away. It will be fought over like the last sausage at a barbie. An extra $100m to go towards clearing debt and rebuilding the balance sheet. At some stage the profit, plus debt restructuring, the fact that Tullow's oil is not sourced from the Gulf, and lease extension will result in the company being rerated from a debt zombie to a viable oil company with strategic assets

When an oil well is stopped from pumping its called a “Shut In”. Its not like a tap the well is sealed with cement it cools the pressure drops the oil becomes waxy it’s a slow and laborious process to restart the well and sometimes the wells become damaged and production stops.

The Iranians know this because after their wells were closed after the tanker wars they closed with 6 MBPd and reopened with only 4 MBPd.

So the Iranians having the ability to ship oil and knowing their wells will not be shut in could make a lot of money if all of the gulf oil was shut in and then when reopened faced large production losses. Now everyone in the gulf with the exception of Saudi have no more than 20 days storage so they are all shut in now.

Saudi has 64 days of storage and 7MBPd is being exported via the East West pipeline. We are now at day 42 so some of Saudi production is coming close to shut in. We have 11 days of negotiation. To push Saudi into shut in you would need to restrict the Strait so oil could not leave and then bomb the East West pipeline so that oil could not leave. Then stall on negotiations until Saudi goes into shut in. After that happens Iran and Russia would be the few non US large oil producers they and the USA would make a fortune.

Well the Iranians are stalling on ships leaving the Strait in the first two days only one non Iranian ship has left. Yesterday a drone hit the East West pipeline pumping station. Funny the USA is letting Iran get away with it, maybe they realise the game.

If the gulf hits complete shut in it will take months to restore production and nobody knows what production levels will actually be achieved we might lose a third of 20 MBPd.

That would elevate the price of oil for years to come and totally change the value of Tullow

Zerohedge have announced that Iran has declared 15 vetted tankers are to be allowed to cross the Strait each day. Today Thursday the second day of this 14 day peace period a single tanker that was not Iranian actually crossed the Strait. For information normal levels of traffic are 140 tankers a day. Today is day 41 of the conflict by now all of the pre 28th Feb tankers have arrived in the USA and Europe. The UK had its last delivery of jet fuel from the gulf arrived 7/4/26 Hooray that's plenty for everyone.

Even if a new tanker of jet fuel left for the UK from the Gulf tomorrow it will not get here until 20th May but it will not be coming. I can see a lot of problems at Heathrow this summer.

Good new Tullow's next cargo load is early May it will be accepting open bids. Currently Tullow's market value is below £200m. A full tanker in May will be going for $150-200m. I am sure someone will be pondering on this inconsistency.

@JMAX

You do have a point In February Tullow's Senior debt some $1,2 bn was priced at 60% of par and the value of the company was worth less than £100m. The business plan on $65 oil worked on new debt at penal interest rates that would be charged but did not have to be paid but could be rolled into capital over a number of year. The plan expected accounting losses but cashflow. The cashflow was to be used to drill more wells. Eventually when enough wells had been sunk the last few years of the lease would be used to generate cash to try and pay the debt off. But that was a $65 oil plan.

Today Tullow's debt stands at 95% of par. The April load was sold at $139 a barrel given the $10 of hedging loss thats nearly a million barrels of oil with a surplus of an additional $64 a barrel over plan ie an additional $64m over plan in a single month. This is day two of the reopening of the Strait about ten ships have got through the Iranians have now stated the Strait is mined there are two weeks of talks. The next cargo lad for Tullow will be very Late April early May. Platts Spot Brent is still $118 today even with a peace declaration. If ten ships a day pass for the next two weeks the May cargo of oil will sell for more than the current capital value of Tullow today. Thats a single tanker load.

Goldmans have just stated that they project if the Strait is locked another month then they expect $100+ oil for the rest of 2026. But that's Brent future Brent spot will be $20-40 a barrel more. Thats an additional $50m a month paying off debt yielding 17%.

Currently Ghana cannot use the TEN gas because its current gas processing capacity is fully utilised and so its burning oil to generate power. The TEN gas is being flared or reinjected back into the field. Ghana has greenlighted a new gas processing plant to come on line in 2027. This will result in a gas sales agreement for TEN a longer lease for TEN and higher oil prices. Currently without these and $62 oil projections the TEN field has a negative value on Tullow's book. That will change in this years accounts. The higher oil field values form higher oil the renegotiated longer leases and a TEN gas agreement will mean an increased oil field value and lower depreciation expense.

This means Tullow will make a substantial profit this year. This alone will mean the value of the company will be rerated. As things stand at present by year end the company at these prices will have a sub 1 PE ratio.

But we need all voices so please keep doing what you are doing

My calculation of the prices of the 7 cargos despatched in 2026

1 64.51 KOS Early

2 66.91 Tul

3 68.50 KOS Early

4 71.28 Tul

5 93.82 KOS Early

6 107.31 Ghana

7 139.00 Tul 2nd April

Note that the price Tullow gets is Platts Spot Brent and not the Future Brent often quoted. Spot Brent is currently $25-30 higher than the June Brent future everyone is watching.

Also note the triple collar that takes out $10 a barrel in the $90 range. So Every load $10 above $100 is worth $20 in the $65 -$95 range

The $139 price we got in April means that we can hit $85 for two or three months later in the year and still hit the 10 months of $100 average.

With the current state of the market should Tullow have a spot cargo available early May 26 I think they will get $150-200 a barrel for it

At current rates Brent June 26 will be crossing $100 within the hour

I think a more likely scenario is Iran is playing for time. A tanker from the gulf takes 15 days to the far east around the cape or to the USA is 40 days. We are now on day 40. In 2 weeks a lot of countries will be making serious in roads in to reserves. You have a group of New York real estate investors taking on Religious fundamentalists who have had their ranks slaughtered. This will not be resolved quickly.

Hello @xxnjr

I hope you have had a good holiday

Do you have the dates of the other 2026 cargo loads? I am attempting to tie the dates of loads to the other data supplied by Tullow. With a 70k barrel per day projection for Jubilee J74P kicking in in January, the normal 15 day maintenance closure in March, the 1.67% monthly production depletion plus TEN I was expecting 6,062,112 barrel by end of March but we have shipped 6,650,000 barrels by 2nd April. Do you think its possible due to war they did not close for maintenance in March or they had some 2025 barrels in the tank??

I am trying to build a model that runs to end of year to estimate YE results and whether we will hit that extra 2026 load

The thing is Tullow is selling at Platts Spot Brent. Yesterday that was at a $32 premium to the quoted June Brent futures price.

Hi

What I understand from the collar structure is that the structure takes out $10 a barrel in the $95-$105 range. Its a three contract collar that sells a call over $95 -$105 but if extreme circumstances kick it all proceeds over $105 are received in full.

So interesting things

1. Tullow which was a company in Feb 26 with an equity value of less than £100m but carrying $1.2bn of debt at 69% of par value faced a 15% drop in oil prices yesterday. Exxon Mobile dropped 7.69% Tullow dropped 3.71%.

2. Iran stated that because it has actually mined the Strait of Hormuz ships transiting the Strait have to follow a route very close to Iran and not via the usual shipping channel. This tells us 2 things

a. When this thing is finally over the Strait will not be in full operation until the mines are cleared

b. The normal flow of 130 ships a day in both directions are not going to happen

3. The Lloyds list rules states that after a ceasefire is declared to retain insurance ships must stay at anchor for 10 full days before moving that gives around 500 tankers 3 days to leave the Strait through a very narrow channel paying $2m a pop to Iran. That simply is not going to happen

4. On the first day of the Strait being opened 6 bulk carriers and a Chinese oil and chemical tanker actually got through. Chances were the majority of these were Iranian cargos.

5. Brent June 26 Futures contract that had dropped to $91 on the declaration of talks is now up 6.6% to $97.02.

6. Tullow does not sell oil on Brent June 26 futures. It sells its oil on Platts Brent Spot which was running about $40 a barrel over Brent June Futures.

7. By early May when Tullow ships its next cargo will be Platt Spot Brent will be at least $150 a barrel.

8. Another day has gone by the last tankers that left the Strait on Feb 28 2026 they travel about the speed of a man on a bicycle that’s 25 days to the Far East 40 Days to the USA and via Cape of Good Hope 40 days to Europe. Hence the Far East is blowing up because the tankers stopped two weeks ago, but for Europe and USA we are still unloading our last tankers. Iran by opening the Strait but by restricting the flow is playing for time. In four weeks time when Tullow is selling its next 1 m barrel tanker load at Platts Spot Brent you will be seeing $200 a barrel

9. Finally we have now lost a lot of the short term speculators who were hanging on terrified the war would end and Tullow would go back to 8p. They jumped off at 11p yesterday and will now watch the price steadily climb and kick themselves

Hi @antonvb

As I understand the agreement there is a cargo facility for granting credit on shipped cargo and a bump up interest charge should oil exceed $65 a barrel on the senior and junior notes, together with a capitalisation of interest should Tullow have insufficient cash for operating expenses, . As far as I am aware the oil sale price is determined by spot Platts Brent

1. Tullow is in a partnership and works two oilfields that pump oil into a floating reservoir. The partners each take turns in drawing a roughly 1m barrel tanker load which is sold at the Platts Brent Spot price.

2. Tullow and Kosmos take roughly one tanker a month Early month and Late Month Ghana Group take one a quarter generally March June Sept Dec.

3. The last published records show November 2025 Tullow was early Kosmos Late

4. On the quarter dates the order changes so the order switches in December 2025 and March 2026

5. So far in 2026 we have consigned 7 loads at the price of $64.51,$66.91,$68.50,$71.28,$93.82,$107.31 and $139.00

6. On that sequence Tullow would have received Jan $66.91, Feb $71.28 and 2nd April $139.00

7. What everyone is reacting to is the posted Brent price that is currently $94.35. The thing is firstly that’s the June future the current Platt Spot Brent is going to be far higher. Especially as a tanker travels the speed of an average bicycle. Some of the tankers that left before the war have not arrived at their destination yet. Immediate supply was at a $40 premium over the future price yesterday. That is only going to rise as the gulf attempts to sort themselves out

8. The other thing is Tullow has a triple collar hedge in effect it loses any revenue between $95-$105 and then takes 100% of revenue over $105. So a $10 drop from mid 100s to mid $95 has very little effect on income.

9. There is very little point looking at futures prices, the only price is that of the average Platt Spot Brent when Tullow’s cargo is loading which now will not be until early May 2026. I suspect that after this relief rally prices will be edging up again.

10. However that $139 load will supply a lot of surplus in the forthcoming months to hit that average $100 a barrel for March -December 2026 target

Https://oilprice.com/Latest-Energy-News/World-News/Physical-Crude-Hits-Record-Highs.html

I do not understand why everyone keeps quoting the June Brent future price for oil. This is the future price for June you might as well quote Dec 2027 its meaningless. Tullow is selling its oil at Platts Brent Spot. That hit $150 a barrel today

https://oilprice.com/Latest-Energy-News/World-News/Physical-Crude-Hits-Record-Highs.html

Oil prices pulled back on Tuesday while physical crude markets surged to record highs, with traders taking a breather even as the underlying supply crisis worsens.

WTI crude was trading at $113.7, up modestly on the day, while Brent slipped to $109.2, reflecting a cooling in futures after a sharp run higher driven by panic buying in physical markets.

Meanwhile, real-world crude prices hit levels not seen before. Dated Brent—used to price much of the world’s physical oil—rose above $144 per barrel, with some cargoes effectively pricing north of $150 as refiners scrambled for immediate supply.

This is a story currently on Oil Price .com

It shows what Tullow is actually receiving for its oil and not the June Brent future price that everyone keeps quoting.

Hi @Tornadotony

I think you are not using the correct numbers:

1. I have modelled the data supplied by both Tullow and KOS trying to get my models to hit given production figures and ultimate outcomes.

2. Everyone is still looking at Brent Prices. The price you are seeing quoted is the June 2026 future (currently $109.20). Tullow sells its oil on Platt Spot Dated Brent thats currently over $133.36

3. I have matched the KOS jubilee production estimates, together with a 5% per quarter field degregation, along with the estimates for new fields J74 P coming on line in Jan 26 and J75 P coming on line April 26 and then the other three fields Jul 26 Oct 26 and the last one will not kick in until Jan27. I have also assumed 15 days shut down in March 26 for maintenance. The projected oil production on those assumptions match loading records up to April

4. A further factor is the hedge collar the extra $180m at $100 oil assumes a collar that takes $10 a barrel out between $90-$100 oil but after $100 oil Tullow gets all of it. So oil over $100 is more valuable than oil between $65-$100.

5. So I am projecting 2.6m barrels in Jan 26 to nearly 3m in Dec 26. ie a disproportionate amount of production will be sold at the higher prices later in the year.

6. I think you will get at least two or more months with oil in the $150-$200 range that could be generating an extra $200m a month

7. Its pointless watching the share price or even WTI or Brent quoted prices. The only number you need to look at is Platt Dated Brent so long as its above $100 we are all good and the numbers will keep working through until the reported results alter everyones perceptions. That means waiting for first week August

Sorry not Nymex its CME

The prices currently quoted is TWI April future $112.89 Brent May Future $109.80

Tullow sells its oil at Platt Dated Brent Spot the nearest price I can find was last quoted last night on Nymex April $133.26

Quite frankly looking at the news on Al Jaazera there is no chance of a settlement today. ran is lobbing a lot of missiles at the Saudi Oil fields. Up to now they are bring them down. However many of the gulf states do not have a similar defence array. I think you will see a lot of oil infrastructure out for months even years. Note that when Israel bombed Iran's gas wells Iran attacked the Qatar gas field that supplies 20% of world LNG taking 17% offline for 3 years. Well Israel had another go at the same Iranian field over the weekend so expect an Iranian response