Member Info for Tonyb33

The reality is you cannot help but lose money on your hedging in a declining market. Its essentially a disaster insurance policy. However this is why what is happening is so exciting. This war is steadily pushing up spot Brent. But spot brent is dragging up the hedge floor values. The longer this goes on you will gain the ability to buy floors that will instantly transform the value of this company.

At a spot of $150 you can lock a floor in above $100 until Dec 2030. That not only will transform your cashflows but as the oil price drops post conflict what happens is the profits (and taxes) on the Ghana book drop but the tax free income on the London book rises. Not only that but the reserves can now be revalued with contractual prices for 5 years over $100 plus the last valuation used the old lease length since then the lease has been lengthened by 14 years and an additional 5 wells will have been drilled. So the depreciation charge drops toward zero because the reserves are rising not falling.

It gets better the tax charge has been a massive percentage of income. The reasons for this is the UK tax losses on the hedges were not tax deductible on the Ghana oil profits, The IFRS16 accounting on lease interest accelerated the interest charges in the early periods of the lease but the tax was calculated on the lease payment which was less, finally the high depreciation charge caused by the short remaining lease length plus low projected oil prices meant that the reserves valuation dropped dramatically which formed the depreciation charge the depreciation charge impacted the accounting profit but not the tax charge hence the massive tax charges on a low profit.

However with this price structure all of these effects go the other way

So good you agree it was a $22 billion company

There are lots of unique things that will drive Tullow profits higher

1. The release of accelerated interest charges on the early lease termination of the FPSO

2. The gain in value (hence drop in depreciation charge) from the 2p reserves revaluation using the longer lease the more wells and the higher oil prices

3. The fact that the rise in the oil price will mean that the floors booked at $100 plus will mean that instead of the hedges losing money (which is not tax deductible against the Ghana oil profits) the income will be tax free due to UK tax losses

4. The fact that due to the interest credit on the FPSO will mean that the interest charge this year may drop to zero

5. The fact that the rise in the value of the reserves may mean the depreciation charge will fall to zero

6. If the treasury team lock in the next five year income at $100 plus it could mean that when the oil price falls pot war the profits will come from the London book and the costs will hit the ghana book so the tax will fall to zero

There is a lot of negative to get through. But look at the bond prices they were in the 60-70% they are now at 95% this company is turning before your eyes from an insolvent shell to a viable company in the world's most strategic location. The Middle East is closed, there is a lot of rumours that if the ol prices rise too much trump will ban or tax exports, South America is in turmoil, Russia is off limits. That leaves Africa give it time

A $22 billion cake with 4 or 8 slices is still a $22 billion cake

The fall in Brent is for a number of reasons

1. There was a fear that Trump would stop USA oil exports hence Brent was rising against WTI there was a confirmation that he would not do it, but two weeks ago he also said the war would be over today (ie in two weeks) and WTI oil dropped from $120 to $80

2. The Israeli PM said today that the war would be over in two weeks from now. But he also said the only way to stop the regime would be a ground invasion

3. Meanwhile Murban crude from Fujairah (the UAE port in the gulf of Oman the only place selling Arab crude between missile attacks) is up today by $18 to $142

The question is of these three statements which one do you believe

Sorry JMAX I meant USD

Tullow Oil (LSE: TLW) reached its highest historical valuation in February 2012, when its market capitalisation peaked at approximately £14 billion ($22 billion).

Key details regarding this valuation peak and subsequent performance include:

Record Share Price: The stock reached an all-time high of 1,604p (adjusted for splits, this is represented as ~21.44 GBp in some historical databases) on February 20, 2012.

Driving Factors: This peak was fueled by the successful development of the Jubilee Field in Ghana, which achieved "first oil" in late 2010, and high global oil prices exceeding $100 per barrel.

Asset Growth: In 2012 alone, Tullow announced major new oil reserves in Kenya, further boosting investor confidence in its exploration-led growth strategy.

Subsequent Decline: Since that peak, the valuation has significantly decreased due to high debt levels, technical challenges at its flagship Ghana assets, and volatility in oil prices.

Current Status: As of March 2026, the market capitalisation sits at approximately £192 million – £200 million, representing a decline of over 98% from its 2012 historic highs.

Tullow Oil plc

Tullow Oil plc

+6

Hi JMAX have you heard of Google??

Here is another one

What if I told you the three main expenses suffered by Tullow its depreciation, its interest charge and its taxes are all going to go to zero??

Well I will save those for another day

Let me give you a taster

Why is the share trading lower with every dip in the oil price? Because we have a pool of people who do not understand this stock they see the oil price going up and jump on. They are being told this war will end any day now they are nervous it will go back to 8p and they will lose half of teh £300 they invested. What if i told you Tullow will make more money at $50 oil than $150 oil?

Currently the Tullow treasury team if they have any sense will be watching the Brent spot rise roughly $3 for every day war goes on. Butas teh spot rises the futures rise too. Currently the futures discount to spot is as follows

Dec 26 78.42%

Dec 27 71.65%

Dec 28 69.36%

Dec 29 68.05%

Dec 30 67.20%

So to achieve $100 for all of 2026 you need a spot of 128, Dec 27 140 Dec 28 145 Dec 29 148 and Dec 30 149. At current rates we will hit $149 in 13 days.

The treasury team will then have the ability to lock in $100 oil for 5 years

Not only that imagine peace is declared in 14 days and oil plunged to $50 what happens?? The company would make $100 a barrel, but the Ghana unit would lose money because its selling oil at $50 and the treasury book in London would make money because of the hedging. Not only that Ghana would have a tax refund on its losses but London has massive tax losses so zero taxes will be due. The company will make more at $50 than $150

The stock is valued over the short term by different groups of people. I have been spending more and more research on this stock and its unique mathematics and I think this is one of the best plays on the stock market at the moment. This used to be a 20 Billion pound company. Its been beaten down to an insolvent shell. But it has a series of unique characteristics that makes it almost the perfect stock in this trading environment. I am preparing a series of essays on why.

I have been watching the charts for some time it should stop at $50 or $28 but its a fabulous time to buy miners at those prices

Sorry three advantages

1. You are the religious and political leader of your country

2. Your geography makes it extremely difficult to invade

3. You hold the tiger by the tail

Question 1 What can that tiger say to you to make you let that tail go?

Question 2 What do you think will happen to you when you let that tiger go?

Question 3 Do you think your allies China and Russia (who has just come into money) will want you to end this soon or bend over backwards to give you every assistance to keep it going for as long as humanly possible?

As the Vietnamese once said The Americans have all the watches but we have all the time, this is going to go on far longer than anyone thinks possible

WTI-Brent Spread Explodes As U.S. Export Ban Priced In

RBC Capital Markets analyst Julian Triscott told clients, "Our boots on the ground in D.C. suggest the administration favors a crude export tariff over an outright ban, though a full ban remains a tail risk."

Triscott said the Trump administration is likely weighing intervention in the oil market as gasoline and diesel prices at the pump surge, with a crude export tariff seen as more likely than an outright export ban, though the analyst said a full ban is still a major risk.

So Europe cannot source oil from Russia, nor Middle East now USA that leaves Africa

If the guys at Tullow cannot comprehend they have to price their oil as a strategic resource and not on Brent Index they need (I was going to say something but in this environment there is too much shooting)

A very substantial holding and i intend to be suitably rewarded. I have been here before what I am noticing is the buyers are buying in blocks of thousands the sellers in hundreds.

If you were asking to find what is a perfect share in this market?

My reply

1. Physical commodity in USD as the USD printing alone would reprice it

2. The 70% rise in Gold and 170% rise in silver last year points to a move into commodities

3. I would want it geared to the point of insanity to the verge of insolvency

4. The product product or geography would need to have a moat

5. A 70% rise in gold foretells war and famine we have the war the fertilizer stuck on the freighters in the gulf predicts famine

6. War brings demand for goods and inflation regardless of price

7. The company would have unique features that the rotation releases (IFRS16 Profit release, Lease extension revaluation, ability to lock in massively rising prices unutilised tax losses and destruction of key rivals)

That describes Tullow

As the sage of Omaha said

In the short term the price is a voting machine

In the long term a weighing machine

Most pricing models are based on this war ending tomorrow

Most people assume it will last a few weeks

Australia has 20 days oil so they are praying

The Senior bonds were at 70% on 12/01/25 they are now at bid 95.64

If the share price remains the same and the war does not stop for a few weeks the whole company will be priced at less than one months production in a world with no available oil. The share price will adjust to this new reality

Barnety 2000 Is it possible that the company has released the company share option positions. I saw the big award to a director go through a few days ago. It could be a lot of the employees are cashing in their bonus (some of the sales were for less than 10 shares)

There is only one analyst that has posted post the war starting they give YE26 EPS 3.68 YE27 EPS 5.61 with a guide of 35.45 (based on a multiple of 9.633).

The cash forecast was $180m pre financing being $80 of debt and $100 of income with guidance of another $180 of income if Brent hit $100.

At the moment the listed prices are irrelevant Australia only has 20 days of fuel its 28 from the gulf and add 10 days post ceasefire insurance requirements not to move. If you have actual oil you make your own price. Brent Futures are over $100 to July and as high as $86 to December. I think the $180 is modest it is calculated as $5m extra per month per $10 over $65

This point is not being properly understood. The significance is even if the Tullow treasury team did not cancel their floors once the first missile hit there is going to be a substantial profit to be made as the sale will be based on real world available oil prices (which are about $40 a barrel over Brent). The loss on the floor will be based on Brent prices. There should be a lot of additional profit of 1.2m barrels a month at $40

Hi JMAX

You are missing the key issues

1. If Spot gets to $200 the strategy would be to lock in the next three years of production 100%.

2. The actual price realised doe not matter because you have locked in the price via hedging

3. The only scenario where the hedging income is not positive is where oil stays in the $100 plus level.

4. The hedging income would be tax free