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Looking at other Oilies and their recent H1 statementsf, the tullow H1 2023 results are going to challenging due to delta in OP between 1H 2022 and 2023 and hedges just starting to reduce.
I expect market to take their opportunity and give us a kicking. The real news is H2 results with upside of hedges dropping off and JSE production and anything else that gets across the line.
SP should stabilise in mid 40s if no more news on Kenya before getting a leg up once full year results and future performance is factored in with OP set to average $85 in 2024. I also expect many PIs to cash in if SP gets back to mid / high 50s as that reaching out more recent SP ceiling which all part of the game.
GL LTH
CDF1 - I have been noting the same trends in SP. There is a glass ceiling that it cannot breached currently and its strange given the improved fundamentals of the company across all areas. Clearly heading is having something to do with SP and the reduced production rates which will both improve as we head in to 2022.
I do wonder if the shorts deliberately spike the price to 64p to allow them to drive it down to offset previous losses by not exiting earlier when in 20s/30s. We will have to see how this plays out in next few months and understand impact of Kosmos purchase of Oxy % with Tullow likely to take up the pre-emptive rights, increasing their stake but reduce free cash in process.
Is that 8,000 net extra to Tullow ? I'm sure Tullow stated that the new production well was providing in excess of 10K/day and was exceeding planned flow rates. With 3 wells now drilled (1x Prod, 1 x WI at Jubilee and 1 x Gas injection at TEN) we should be seeing a bigger production gain than quoted. They could of course be including for declines from other wells, providing an overall net gain on production, but that would be a strange way of presenting good news as the net gain will keep reducing.
Looking at little further ahead in to late 23 and 24 a number of new production and water injection wells are planned to be executed by our partner in nearby CDI. Although the current contribution from CDI is small, this should been seen as positive in terms of production for the group and will help offset any natural declines. When you think about the new wells TLW is currently drilling at Jubilee and Ten, together with Jubilee SE step-out and the additional production from our non-operated asset in CDI things look really positive and should drive a shift in sentiment and encourage and uptick in SP. We just need to get these 'shackles' off our ankles. Hopefully the board give some positives on 15th Sept that helps them on their way ! GLA
ARCM deliberately did not disclose their accumulated short position which when declared gave them a significant lever in the re-financing negotiations effectively forcing PMO to accept the low ball Chrysaor offer or face a significant shareholder calling in their debt which they could not be covered and would have force them into administration. Could a hedge fund be doing this to TLW as something is not 100% judging by the SP relative to OP.
I have been watching the share price over the last few months and I’m starting to wonder if those with a vested interest in knocking the SP are doing so to prime the company for a low ball takeover offer. I was a LTH in PMO and suffered at the hands of the big short. The big difference as I see it between TLW and PMO is the fact the refinancing is all sorted so there is less leverage from funds with a significant interest to manipulate the stock but it does feel strange that it is been held in a very tight band given the OP. I hope it is just sentiment towards current production rates which should start to recover with the infield drilling programme now well underway. If there is bad news on Kenya then this may also be holding SP down but the signals all appear positive. Let’s see what the 15th Sept brings. GLA
Tullow Ghana Delegation including MD visited Ghana president recently to re-confirm $4b investment in Jubille and Ten over next 10yrs as part of Ghana Value Maximisation Plan that we have heard about in previous commas fro Raul.
The infill drilling that is ongoing this year and next together with Jubilee SE drill centre (min 2 producers and 2 WI should improve net production significantly in the next couple of years.
https://www.linkedin.com/posts/tullow-oil_a-delegation-from-tullow-ghana-led-by-managing-activity-6831159722071089152-koOY
GLA
All,
Could this statement below from the 2020 Annual Report and Accounts have any bearing. I am a long term holder and can't recall if Tullow addressed the LFT issue on 10th March update. If not then the next few days could provide us with more clarity on the overall refinancing. Hopefully this has either been addressed or will be deferred as part of refinancing discussions.
On 26 February 2021 the Group submitted a Liquidity Forecast Test to the lenders in respect of the February 2021 RBL redetermination. The Directors concluded that the information submitted to the lenders under the RBL Facility, which is different from the Base Case and the Low Case scenarios described above and includes mitigating actions, fulfilled the requirements of the Liquidity Forecast Test. At the date of approving the 2020 Annual Report and Accounts, an approval in respect of this test is yet to be received, therefore a risk remains that the Group could fail this test.
If the lenders under the RBL Facility were to conclude that the information submitted does not fulfil the requirements of the Liquidity Forecast Test and the Group was unable to cure the resulting default by the end of April 2021, there would be an
22 Tullow Oil plc 2020 Annual Report and Accounts
event of default. Such event of default would allow the lenders under the RBL Facility, at their discretion, to cancel the RBL Facility and demand that all outstanding borrowings under the RBL Facility be repaid and/or enforce their security rights. This would in turn trigger other creditors’ rights to call cross-defaults under the other financing arrangements of the Group (namely the Convertible Bonds, the 2022 Senior Notes and the 2025 Senior Notes) which could result in the entirety of the Group’s borrowings potentially becoming immediately repayable by the end of April 2021. While discussions in respect of a Refinancing Proposal are continuing the Directors believe that, if required, a waiver of such a potential event of default in respect of the Liquidity Forecast Test could be agreed with the lenders under the RBL Facility.
With consideration of hedging I estimate that Tullow are averaging USD 64.75 bbl which is just under 30% above the base case rate of for 2021 of USD 50 bbl which should put us in a good place for negotiations.
ATB
I put a stop loss in this morning at 23p thinking that would be semi-safe but it got taken out. I was probably being a bit greedy in setting price and should have gone lower. It was for a sizeable amount of shares so algos are at work to secure shares !