RE: Dilution11 Oct 2020 16:48
Supercooper
Many have said on here that it depends on the oil price. If oil breaks out and goes above $55 forget about dilution. If oil stays below $45 in January 2021 than a dilution of some kind may be possible. As for in-between $45-55 a mix of measures are likely to prevail and a modest dilution to seal a deal may happen. The reality is that Bloomberg late last week advised that anyone investing in oil companies, to focus on those in low cost jurisdictions like Africa, on companies that have focussed on cost reduction and improving the value of assets they hold. Tullow not mentioned by name, but the best description anybody can hope for to stand and hold here and hope for the best.
I have monetised some Tullow losses against gains since April 2020. It has left me with cash to deal with modest dilution risk on what I hold. It may prove completely unnecessary. What I do know is that the oil industry can not pump out oil below $45 for a long period of time. Exploration has collapsed, Capex has been nearly wiped out. The infrastructure to replace it has not been built. The oil sector is sitting in a zone of long term depression at the present time. I hope that does not come to pass but we await what happens. The world has gambled on no major war conflictions taking place while dealing with Covid-19.
TT