Member Info for Tornadotony

https://www.malaymail.com/news/money/2020/05/19/petronas-completes-50pc-farm-down-transaction-in-block-52-offshore-suriname/1867599

You will need to investigate what they sold it for and whether oil has been discovered in that block thus far.

bluemoon71

Already trading below enterprise value with debt depreciation and tax considerations. It is below $35 Brent which some consider a second wave Covid-19 price. Its market value is also discounting up to $180M production loss on oil price sold for 2021. At some point buyers will come in and say thanks for the discount share price. In fact it flies in the face of how most companies are responding to Covid-19 in the market place, it ignores the cuts in staff and stimulus measures impacting the global economy. The Tullow bond actually went up yesterday.

Days like this when the best thing to do is not look at the market and go shopping or a walk somewhere.

Cluelesstim

Past updates provided comparable tables to previous quarter and previous year. So I do agree that to little information was given and we were left to fill in gaps. Of course other issues are going on with Kenya in the background and its best to work through an audit their Government has initiated which incidentally helps nobody. The situation on Uganda is most likely in the bag as there is an urgency to develop assets and that timetable has been made public from a number of sources. I would not be surprised if a deal to farm down part of the Suriname block is going on before the drill.

If we take a full blown second wave taking Brent back down to $35 for 5 months it knocks out the $75M FCF I believe they have. I wonder if the curve on prices is operating with that issue in mind. If it does happen we know the company is on breakeven. Shell expects the oil price to then go back up to $40 plus next year if that was to happen. Of course a lot of things can prevail to the upside but we are seeing preparations for the worse.

The September RBL will be important. They should have clearly visibility of $500M debts being paid with $15M returned to Tullow. The FID target might slip to January but remains possible for December giving another $75M. I believe the RBL will be satisfied that liquidity is okay to their next meeting in late March 2021. By that time I would expect the world to have more tools to manage Covid-19. The resources thrown at it are huge.

Tony

The problem is lack of visibility caused by a Covid-19 fog. All the impairments were chucked in weeks ago. The share value has halved like in most sectors outside of precious metals. The fog will lift. Populations will manage activities with Covid-19. The virus may learn to evolve into a non-lethal virus. Companies may have therapies that render the disease on par with influenza. Oil sectors and life as we know it eventually returns to normal. In the meantime its attention to detail by everyone and to be supportive to others in working environments and other interactions. Things will get better.

The company is not making a loss and reducing its debt pile 20% in 2020. The most impacted asset on a long term basis at $60 oil price was Uganda and its being sold. It has no real impact on all the producing assets. It does hit exploration assets but these have a minimal valuation outside of Guyana and Suriname.

https://uk.finance.yahoo.com/quote/SRBIF?ltr=1

Neversellshell22

Sammy is highly intelligent and very successful. Involved with infrastructure development in Benin. He has worked in the petrochemical industry himself, built up a business that worked with Tullow in the past. He believes in Africa and making the world a better place. One of the reasons why I am staying solid and holding Tullow and not giving up. I really do believe they will succeed. I would describe Sammy as a linker because he is multi-skilled.

The new manager likes his squad. Happy with resources available. He has Sammy and a significant number of large investors that incidentally hold a lot more shares than the short brigade so the Board looks supportive with their choice. Tullow has a fair amount of retail support. Its now the time to get the right strategy, right tactics, good training and using the energy and talent in the best way. The target is 45p share price and back to FTSE 250. I am maintaining my support and see if we are guided to promotion.

Creating the hedges also cost money and it may well be $20M. Perhaps that back pocket is buying oil at a good hedge price in 2022 and more for 2021 when the opportunity arises.

The actual cost to lift the Non Ghana oil around $275M as non-operator. For Ghana $237M plus debt interest of say $230M. Plus $300M Capex and $65M decommissioning, payment to Governments of say $140M, Marina drill cost $30M, restructuring costs were $30M so far. Probably have staff bonuses to add and hence why I think its about $1325M with 75M FCF to give $1.4B. Forgive some rounding in those numbers, but it gives a rough idea.

Slift my estimates also give $75M FCF and the CFO in April suggested that figure as well. They have a really dire outlook on the oil price like Shell.

Unfortunately on 12 handle but looks okay long term.

The RNS today differs to the 2019 report which implied 50M-75M FCF at $45 breakeven and $50 sold for the year. I suspect the initial estimate was allowing nothing for contingency and any new CEO will want to have it in their back pocket if something goes wrong as advised y his number 2 introduced as a new staffer from Delonex. The breakeven suggestion and earlier FCF hint tells us that all in costs in 2020 are $1.4B. Next year we know those costs might have 2% inflation to give 1.428B. Interest reductions takes Tullow costs back to $1.4B. $70M in cost reductions finally arrive on the bottom line to give $1.325B next year and $55M hopefully not being spent anywhere near Uganda and Kenya buts lets assume half of it is spent on the Suriname drill. So the costs now bear down to $1.3. Now if production drops to 70,000 barrels than its another breakeven years at $51 average price of oil per barrel. If it was 80,000 barrels a day the FCF is over $200M and at 75,000 it is $100M. The message is 2021 has a chance of being a recovery year.

Every stock I sell out of and then put in my other half portfolio does extremely well. Otherwise I lose 4 fingers.

All it takes is $10 a barrel uplift or 10,000 production uplift at some time in the future and this share is back to 50p in no time. A case of waiting it out and not losing money in the meantime.

I remain on hold. I believe Dorothy resolved a lot of problems. Covid-19 will eventually end. The world population grows, the energy needs increase. TimmyG only you can decide where you nvest and what you are comfortable with. I take profits and losses frequently but I feel everyone is getting fed up with lockdowns and the may start pushing on regardless and rely on a good mask.

Mrs Tornadotony wanted Serabi.

A lot of costs are front loaded in H1 and a lot of savings appear in H2. The financial report comes in September. The company emphasised this point back in January. The company is projecting a better performance than analysts estimated. The hammering this morning is completely unfair.

The RNS has beaten market screener forecasts thus far with the only caveat that site gave an annual figure (plus $60M or so). $700M revenue is a good result. Production improved in Q2 over Q1 despite Covid-19 which is again a good outcome.

Marketscreener gave a negative cash flow along with all the analysts of around $100M and the company forecasts breakeven on forward curve. This is another positive output.

The company gave a current debt position but no likely projected picture for the year as this would give away any negotiation positions on sales.

The longer term oil price assumptions are being done by nearly all the oil companies and should not be an issue this morning.