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Most major oil companies are effected by the restrictions but the main problem for tullow was the debt. No financial institution would lend to a company with reduceing production and almost $3b in debt. They had to sell off assets to give confidence and to show they want to keep the company operational as a going concern. When this was done they could sort out the refinancing which was more important than drilling for oil. We must remember during the early months of Covid when oil hit minus figures no one was saying tullow done a bad job with the hedging. They were all saying well done to tullow. There would be no tullow only for the hedges of 2020. I believe what OPEC are doing is smart. Play the long game and don't flood the market with oil. Keep the prices between $65-75 and if it goes above that level open the taps a bit to pull it back. What they don't want is it getting too high which will make it profitable for the fracking and over the space of a month there is an increase of 2m bopd which will crash the price to $50 which is no good to anyone only customers. Then the franking stops because it's too cheap and it shoots back up again. Stability is the key to give the oil industry time to recover from last year. When you look at Total's announcement to buy back shares because of the unexpected profits from the first half of 2021 it is an indication of what we should expect by year end. When the news on Kenya is released I believe it will decide the fate of tullow. It has to go a head to bring tullow back up to the region of 100,000 bopd. Kenya is very keen for it to happen. If tullow don't take it on someone will now that the land acquisition has been almost complete. If they get it going and oil stays above $60 for the next few years until the bonds mature in 2026 they should be in a very comfortable position to repay them off. Because Kenya is mad to get oil flowing I'd say a more favourable deal for tullow could be negotiated on the construction of the pipeline. Rahul is keeping his cards close to his chest and not predicting anything that may seem hard to achieve. The shorter have realised the only way is up and had to call in help to secure a safe and controlled exit. In the next 12 months this share is only heading one way but it depends on their decision on Kenya which will be known by Christmas.
All you have to do is e-mail tullow. The man was very helpful and happy to help. At the end of the day we as investors have the right to know and it was his job to inform investors. By next spring tullow I'm guessing should be upto close on 70k bopd when the 4 wells are on line.
I'm in Tullow for sometime now and took some profit when I could but missed the big climb from the 30's to 60. I had sold out to use the money to average down in another stock so I could get out of it and buy back into tullow because there is real potential in tullow. There is a lot of guessing going on with hedging for 2021 and a lot of misinformation. All you have to do is e-mail them. I got this reply when I e-mailed them regarding hedging!
"Our hedged volume for 2021 is 40,000 bopd. The weighted average floor is $48/bbl and the weighted average sold call is $67/bbl.
We don’t breakdown for half years, but for the first half of the year the realised price was c.$60/bbl."
I also asked about what I thought was a discrepancy in the full year production as I thought it should be higher than the 55,000 to 61,000 bopd with the addition of to 2 extra wells and I received the response below. Maybe they are been cautious in the estimates until they have the oil out of the ground. I was also sent a link for the licence which I found helpful for working out how many bopd are added to tullow. I still believe by year end the bopd will be at the top end of the 61,000 if not slightly higher as the 2 new wells will add by my calculations over 7k extra bopd if all goes well.
"The impact of the four well campaign in Ghana this year is included in our production guidance and yes, they help to offset the natural decline of existing well stock. The first of the four wells, Jubilee producer J56, came onstream this month and the second well (J55-WI), which is a Jubilee water injector is due onstream in 3Q21.
The encouraging results of c.10,000 bopd from J56 is slightly ahead of expectations. The J55-WI well is expected to add c.8,000 bopd."
Our working interest in Jubilee is 35.48% and in TEN is 47.175%. If useful, our full licence list is available here:
https://www.tullowoil.com/application/files/1516/1847/3171/Tullow_Oil_plc_-_Licence_Interests_.pdf"
I hope this information is useful to those thinking of selling, buying or already invested in Tullow.