Member Info for Tornadotony

Les played a poker hand close to his chest. We have 5 scenarios.

1. A farm down on exploration assets is on going and may yield $60-80M.
2. A big farm down or all of the Kenya asset is to be sold and if we vote for it an RI is avoided.
3. They do a 50% dilution RI and raise $300M from shareholders.
4. They have delicate negotiations with the banks and bondholders who feel comfortable with the new plan to extend high yield production life to pay off debt. The rollover is to deliver $900M payback by 2025 and the remaining 41.5B is between 2025-2030. Bondholders and banks may want to exercise warrants later if any debt is not paid on time on the new schedule.
5. The company either merges with another oil company or is now set up to be sold to a major oil company who wants the Ghana assets.

If they do not agree to rollover cuts 3 months than oil retreats and if they agree a full cut it advances. Not sure how it will sit on a compromise in-between.

If Synairgen SP chart is plotted against Tiziana Life Sciences over the past month, they are just about the same drop. http://www.stockchallenge.co.uk/ftse.php Synairgen is listed quite near TLS in the attached chart.

A lot of companies listed below Synairgen may have a licence to explore an area and make no money and have a value of say $80-$140M and I know some of them and they have a lot less cash than Synairgen. I am invested in companies that are where Synairgen was a few weeks ago and incidentally they were in Synairgen's current position mid September and have risen on vaccines news as it might get the economy going again. Some of what has happened involves investor stock rotation.
The problem is that we have the assumption that vaccines for Covid-19 are perceived of wiping out all the income base for any therapeutic in development. The fact that the therapeutic was never for all the population and was only for hospitalised distressed patients of which the market was less than 1% is ignored. The second fact unfortunately is that same under 1% could still end up in hospitals despite the availability of vaccines and this is because the 5-10% of people not benefitting from the vaccine are likely to be all within the original income market area for the Synairgen product and they will pick up infection through transmission as it will still be in cold rooms, caught from asymptomatic carriers, other animals or poorly cleaned surfaces. Eventually vaccine data, and future data arising from vaccination programmes, along with the P3 results could well show this to be the case. None of this undermines the value of a vaccine, but Synairgen has to show it has a cure for a market niche and it has a demonstrable income in serving that need.

The share price is what it is. The data and future knowledge will reward whatever it shows the world to be. The best thing to do is remind the investment community where possible that therapeutics for Covid-19 infected patients will still be needed and sadly that need may always be there as a part of the population are genetically vulnerable because of the make up of their own individual immune system.

Holding to March and will see what the real science has to say.

Where is the money going. Pets at home the only decent riser. Crypto, gold silver everything is tanking. AAZ had quite a move at 13:40 left order in the book in case they try it again.

I have noticed the resistance line descending from 12 October and the top of it is 74-75 where we hit today. It will be interesting to see how strong that line is and I think we need to wait for Monday for any real test of it. Light volume won't cut it.

We should not be surprised by the possibility to get a higher low at some stage somewhere between 62-66p. We are a long way from news and this would be consolidation over time. It will then bounce off that low form a peak and drift back again with another higher low. This pattern could go on all through December until we get nearer to news flow.

28.3p is strong support and 33.1 is now resistance. Wide trading range for those playing it.

The bond market response is quite positive since CMD thus far.

Just offered a dummy sell for 120,000 shares and was offered a much lower sell price. If they were short of shares I would have got the price of the sell being offered.

No is the short answer otherwise most of AIM would have minimal spread.

I should comment that Shell and Tullow were in lock step until Tullow launched above 29p. If RDSB stays down today, probability favours a 29p close and they go back into sink and move in parallel with each other again. If Shell goes up, Tullow will stay flattish until it hits 1350p. The CMD did not give enough evidence to support outperformance against Royal Dutch Shell which has a very strong forward look.

Slift

I suspect another sale of some kind is being discussed. Total may want 30%-40% on a Farm down Guyana block to control that project. Tony

What investors may need to except is that the Kenya asset could be sold to one of the majors and the Kenya Government should be highly supportive towards Tullow for doing it. We may not like the asset price obtained, but it would mean no RI for de-risking it and being an off shore oil company only that can export to any refinery on the globe. The sale gets the company through transition year and supports 3 well drills of which two are in Ghana and get production up to 75,000 barrels in 2022 and heading to 85,000 in 2023. That is a good road to be on. The bonus is oil going above $55 next year if economies can recover.

Stayed put but realise this is heavily traded by PIs. Shell and BP have settled back in the past couple of days. The rise to 28p coincided with the improvements of the oil sector and should be strong support imop. Tullow lifts again if oil sector and oil price has another push upwards fuelled by Opec on Monday. For that reason and with USA closed I would not play around on oil stocks myself. As for Tullow, the banks I feel will give their support. The company has brutally stream lined, its a lean mean tightly run ship. Eventually forward oil prices will help. They just need to get through transition year and in 2022 go up with the likes of airline stocks. The share price will be a lot higher than 29p come 2022.

Having listened to the CMD, have gained a better insight on a number of issues.

1. For a $10 increase in oil price income goes up by just $150M as so many metrics increase activity as oil price goes up. So the volatility on this share is going to be far lower than in the past.
2. We are being prepared and softened up for Kenya asset to get sold and be supportive on the price they do get for it in 2021 or 2022. Tullow is an off shore oil company and Kenya project is not going to sit well if retained. In fact I support them getting shot of it and not having to waste time and resource on it.
3. The production drop is 200M loss on revenue. The company has $140M cost cuts arising in 2021 as an off set. Capex is $35M higher as well. The company should get $75M FID sometime late in 2021 from Uganda so a $1 more for oil over all of 2021 would deliver the same as the 2020 result. However I suspect a farm down on an asset could square up the balance sheet.
4. The company are clearly putting out a 9 year plan to cover refinancing. The plan requires net debt to be reduced $900M -1200M by 2025. The remaining debt is paid between 2026-2030. The model requires a $55 a barrel for most of that time. This suggests $225-$300M being repaid each year. It is likely production will go up 10,000 barrels in 2022 and another 10,000 in 2023 and stabilised the year after. 3 years at 85,000 barrels/day generates $300M more 75,000barrels/day. The gas handling suggests they may try a peak of 95,000 in a one year to get up to $400M. The $10 increase from $45-$55 generates a further $150M a year which takes debt repayment to nearly $1B. If they sell Kenya they would be near the 5 year target or alternatively they struck new oil in Suriname or something like it.

Overall I believe they do get through all the finance hurdles. In later years they have yet lower debt interest which helps pay remaining debt faster.

I was reminded today on one of the American news channels who was interviewing a nurse about her experiences of enquiring Covid-19 in hospital and was then subsequently dismissed. The reason for her dismissal was due to the fact that it was her third acquired infection of Covid-19 and shown by positive tests. The infection was worse than the other two but still did not need hospitalisation. The hospital and from her own experience was that nurses acquiring the infection 3 or 4 times usually ended up on the ventilator or being hospitalised themselves. As contracted nurse the hospital would argue that the acquisition could be outside the hospital so they had no legal obligations to pay damages to her. The interview also reminded me of a conversation with a mother of an orthopaedic surgeon I spoke to several months back and her son also had multiple infections from different patients again shown up by tests and the need to keep isolating. Most NHS hospitals abandon orthopaedic surgery on Covid-19 outbreaks except in vehicle accidents as aerosol generation and infection is high risk.

The point I am getting at above is that once exposed to the virus and being infected and recovered, it would be expected that the person had immunity and still they got infected again and additional follow on exposures later on in some cases led to more severe Covid-19 illness. These stories do genuinely create doubts how long a vaccine provides protection. Will it result with more severe Covid-19 illness down the track a few weeks later as a vaccinated individual has changed behaviour and had repeated viral exposures than they had before or the vaccine effectiveness weakens with time in a way similar to healthcare workers who endure repeat exposures and their perceived immunity does not last. Overall, I think we have a lot of questions that still have to be answered. I firmly believe that all research avenues are still in play whether other vaccine technologies or therapeutic solutions which are offered here. It is just utterly naïve to think that the existence of a vaccine is somehow going to negate all therapeutic solutions.

Dacorum

From a playing the chart and a dumb ETF robot driven system your answer is yes. As for the reason you gave its a 100% wrong!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The product can be used to fight off a number of lung viral infections that have significant markets. Covid-19 trials help prove that fact. The market for viral lung infections each year is huge and costly to treat patients. A number of older people who will not benefit from a vaccine will get benefit from this particular therapy.

At present still on 5%. However 4% of portfolio elsewhere recently cashed out and so keeping it as dry powder reserve. Its enough to do a 50% average down trade which at the current price is around 130-140p. Holding back as we have no immediate time lines other than start of P3. Hoping to build up a lot of cash in Feb and March so as to be within 10% of wherever the SP is at that time. Having it in my portfolio at 5% reminds me that it is one to manage and sort out eventually. They can take it as low as they like as I can then buy a hanger load of shares as opposed to a shed load and just see it as an extraordinary gift to eventually jump on. I staggered that it is anywhere near the present day price. The market mechanism at times is completely blind.

I did not follow the broadcast and will get it later.

Some things I have noted.
1. Kenya Capex next year is $5M. I still feel this is available for sale if another company offers a price nearer to what Tullow wants for it. They are giving Kenya Government time to resolve some of their issues and see how it is done in Uganda.
2. Cote d Ivoire block next to TEN is very interesting. It is a nice asset to look into.
3. Priority is a significant upgrading on Jubilee and TEN giving from what I can see 18-20 years of production life. (This is hugely important if Les is looking to rollover some debt). Think about it, if the interest rate was just 4-5% for 5 years when everywhere else its 0.25% for the next 2 years and the company generates profits to steadily repays another $1B off in principle over a longer time frame.
4. The Capex is $300M on average each year unlike the deramper saying no figures given. That is easily covered in the $55 a barrel price environment. Oil follows outlook given by Shell and BP.
5. The key is in the recovery mechanics in the Ghana fields. The CEO argues that recovery is there. If only half was there the company has 12 years to find another major oil discovery. That is another time to see what the prospects offer.

Overall I can see Tullow going above 40p. I suspect the RBL end of January will confirm support. I will leave my investment in the draw and really glad I did not entirely abandon the company in September. They are showing enough to investors through life of oil field development to redevelop bond repayments is how I see it.

Only one overbought signal remaining on 5 Hourly, 1 hourly oversold indicators arriving, daily has no overbought signals remaining. The pause was needed to cool the RSI off a bit. It has ran super hot since 28p.

Have a plan ready for what is a screaming buy on offer if your selling at a loss. I sold 40% of my stake at a big loss. 20% of that 40% was recovered by may trading strategy elsewhere (pensana 56-80p and Synairgen 150-219). The second part has yet to deliver but I know it will eventually work say by January. In the meantime Tullow was just a few pence of breakeven for my 60%. I can choose to run that 60% well beyond breakeven if I want to and I feel less stressed on how much of my portfolio is Tullow based. When I sold the 40% I could not average down anymore. The point about the missive is that one has to weigh up of staying put to what other opps the market may provide. At 28-29p my strategy was evens with staying put. At one point it was ahead and now behind. What you should not do is sell and sit on your backside without a plan.