Member Info for Tornadotony

Noggers

Not in this case as the company assets being sold are 2C reserves. They maintain all the 2P assets and existing production that generates FCF. They still have growth areas and a company that is far more focussed and leaner on staffing front. The share price would be in the 80's fairly quick.

Only should be oil

MrD

Any new CEO with brain cells would sell Uganda, Kenya and Guyana licence blocks and assets. Get debt down to $1.4B as taxes have to be paid on some sold assets. £200m FCF on a proper run Ghana production fields fits with that debt profile. Maintain other licence areas in less risky project areas regarding future developments. As Ghana field restores back to 400 FCF, the debt shrinks $250M per annum. Assets value of company 12 years from now without dividends is $2.4B or 126p share price plus any income from successful exploration during that time frame. Your cash ultimately gets returned over time. If only goes up the return rate is quicker.

To deliver higher lows and higher highs. So if it forms a lower high at 50.5p and develop a higher high at say 58. It repeats with a 54 close another day and hits 60+ afterwards. That is a bull trend scenario.

Correction on the expected decision date as negotiations still on-going.

http://www.engineeringnews.co.za/article/oilfields-at-heart-of-tax-dispute-to-cost-uganda-5bn-2020-01-16/rep_id:4136

In short a decision to be taken by 31 March, 2020.

MrD
Not something folks want to do between 55p and 60p but active investors seeing volatility like yesterday will put up a defence against those kind of surprise attacks by Mr or Mrs big finger or Bots. Tony

I do not expect a drop. As quite a few positions will buy back in like mine and the market makers and bots will lose on the move as we will have the same shares we had this morning but at a lower investment cost. Do not be surprised if it stays n 55p.

The position is on for up to 30 days so I will be keen to see what the movement will be like tomorrow.

The bots are tied up in straddles. A lot of people are not selling a bit off for profit as they may have done nothing this morning and just waited to ambush any Bot retreat.

If enough of us are averaging down heavily to say sub 75 and then play straddle just below the bull pen they know we have resources to stick it to them and they the bots don't like it much. I do risk a loss by doing it but it gives some pleasure.

Hence we start playing how they play. What I have done is created a straddle to upset their game plan a bit. At least I feel relaxed on the direction as I get a score wherever they now go.

Just in case USA open is not pleasant. Short created by selling one of my buy tranches to rebuy lower. If it goes wrong I take a modest hit, if I have to close it and buy lower, I have used other ammunition than just averaging down all the time. Quite often when I do this the share spikes up but 6/7ths are long so still happy.

Slowly edging towards an interesting range. I hope we can get half way inside it by tomorrow.

Apologies for typos like farm downs and debt free. Its this website.

Assuming no takeover how do they get out of their problems. The RNS made it clear that 80% of the effort was Ghana, Uganda and later on Kenya. They are doing two wild cats and are overdo to hit one. Savings may well generate $75M securing at least $150M FCF in 2020. I believe the negotiations in Uganda close as all parties need it to happen. I believe it covers $100M off Tullow debt and they have the finance to complete the project. It secures $50M free cash flow 20 years.

I suspect the Guyana blocks get sold and say $250M of debt is squared away. They keep Suriname and Peru going and do farm owns on rest and get $50M off debt. So debt drops to $2.3B in year and 2021 free.

The Ghanaian government finally get the gas line and to Nigeria and Ivory Coast and with top side issues resolved we get back to 88,000K production in 2021 and with some debt rollover Tullow sees some price recovery and we get to 90-95p.

If my estimates are correct the stable price point area for Tullow is 57-59p.

Previously I gave a lot of data to give a valuation between 100-105p. After the drop in oil valuation those figures all change and the new data broadly speaking is 86-90p. This is based on known takeover metrics on reserves and resources plus flowing barrel rates for oil.

Should have said Barrick Gold as they took over Randgold first. I do feel the oil industry is going to consolidate with just big majors. A strong signal for that is $10 off the future oil price per barrel. Future bank loans to find new oil will are likely to be less easy to acquire. I think Tullow will remain independent for another month and that is about it. All my opinion of course.

This reminds me of Acacia before its takeover by Randgold. Another company that got itself in a fine mess with the Government demanding an absurd tax bill. It had a big drop of 75%. Found a stable base, rallied up a bit and then was took out at 50% above that stable price point.