Member Info for WarrenBuffettisRich

Kosmos reports on 5th May. I doubt there will be much additional insight over what TLW reported in terms of field performance but might be worth keeping an eye.

I think part of the play now is betting on both sustained higher oil prices for the next 18-24 months AND operational outperformance due to 4D seismic and OBN. The latter is already showing some promising signs.

If both these factor play out then I think we have a route to 50p.

I’m jealous but that’s wise.

On the $2bn valuation, they must mean EV I think (i.e. equity + net debt). If they get net debt down to $1bn that would still mean $1bn equity value, at 1.5bn shares o/s = $0.67 /share which is around 50p per share.

Tony settled Dated would likely be ~$10 more than front-month Brent as curve is massively backwardated at the moment.

Richard Miller, Chief Financial Officer, Tullow Oil PLC: Yeah, thanks, James. Yeah, it’s a really good question. They’re based on Brent prices and we haven’t adjusted our forecast diff to Brent. Diffs have been sort of have increased materially this year. I mean, West African differentials peaked at about $12 a barrel earlier this year, but there is a lot of volatility in them. We’re maintaining our sort of budget differential to Brent, which is broadly flat.

Digging the transcript and results, it does feel like they are being a bit conservative for FY26. WAF diffs have traded at a significant premium to Brent which should help them quite a bit. They just need to keep production up and if this price environment sustains we should be marching up the SP through the year.

You misspelled 50p

I'm pretty sure that's the industry standard. The commodity traders like Glencore gets their cut from optimizing around the optionality (e.g. to sell at Oman + spread to a distress buyer in Malaysia); they don't typically benefit from too much of a discount vs the flat price at the loading location. It might be discounted $1/bbl for a marketing fee or something like that.

Anyway based on how things in Iran are going I wouldn't worry too much, just hold to our hats and enjoy the rewards in 12 months time (if we even need to wait that long).

@Ian - I assume they'll get WAF prices (Brent +/- spread for location/quality diffs). Whist not Oman prices, it's probably not directly comparable. Once you take out the cost of shipping it won't look that far off (since Asian buyers would switch to other cheaper crudes as total all-in costs are considered).

Few - energy has just been ultra-unpopular as a sector for the last decade and TLW is probably the worst of the bunch that's avoided bankruptcy or dilution. People are just too scarred with PTSD to touch this until its too late. Good opportunity for the rest of us.

Yeah Tony. There is non-zero chance that Tullow could come out of the next 12-18 months effectively with its balance sheet completely reset! Absolutely unthinkable just a month ago but here we are.

Tullow Oil (TLW) — Hedging Position & Oil Price Upside

Based on the January 2026 Trading Statement, here's where Tullow sits:

2026 hedge book:

~60% of forecast sales volumes have a floor at ~$59/bbl (downside protected)

~40% of volumes are capped via sold calls at ~$89/bbl

~60% of volumes have full upside exposure to spot

The three-way collar angle (inferred):

Tullow has consistently used three-way collars — sold put + sold call + purchased call — with a $10/bbl spread between the sold call and bought call, confirmed across every disclosed period:

H1 2025: sold call $92 / bought call $102

H2 2025: sold call $84 / bought call $94

2026 (inferred): sold call $89 / bought call ~$99

This means the "capped" 40% isn't a hard ceiling — there's a $10/bbl dead zone ($89–99) and then Tullow re-participates above ~$99/bbl. At ~$108 Brent today, those barrels effectively realise ~$95/bbl ($89 + $6 re-participation), not $89.

Blended realised price at $108 Brent:

Worst case (plain collars on all 40%): ~$99/bbl blended

Best case (three-ways on all 40%): ~$102/bbl blended

Fully unhedged equivalent: $108/bbl

Hedging cost vs. unhedged: ~$6–9/bbl, or ~$50–75M/year on ~32 kbopd oil mid-guidance

Caveat: The Jan 2026 statement doesn't explicitly confirm three-way collars for 2026 — the ~$99 bought call is extrapolated from the consistent $10/bbl spread pattern in prior disclosures. The early 2026 hedges (added mid-2025 at $76 cap) were described as "predominantly plain collars." Hedges added later in 2025 are more likely three-ways given Tullow's stated practice.

The $59 floor is a good backstop if the Iran risk premium unwinds, but at current prices it's the upside cap that matters most.

Sounds nice. Hope the war isn't so much of a mess we can still enjoy it by then. I'm calling it now - this thing will get dragged out. Iran is supported by China and is the vassal to dismantle US hegemony in this conflict.

What are you planning to do when TLW gets to £1 and beyond? That's my target.

Yeah guys just hold tight - you won't regret it. Even if the Strait is open we have no idea how much production has been lost. Just wait to see what happens and the upside could be huge. Oil isn't going back below $80 in the next 12 months even if the Strait is opened tomorrow and everything goes back to normal.

Looking at the recent posts it's clearly most posters here have no idea what they are talking about. It doesn't matter though; if the price of oil stays above $100/bbl for an extended period then this share is massively underpriced. If it gets to $150 or $200 then I hope you don't spaff your lottery winnings elsewhere...

This seems like a huge deal? I wouldn't be surprised if this became a 10 bagger at some point in the future.

This is brilliant insight! Thank you! Might have to add to my position when I have some cash... European defence spending is going to skyrocket over the next decade.

Good set of results that demonstrate the turnaround. I suspect the SP won't move much until we start delivering revenue growth and bottom line profits though. Worth waiting for.

Https://www.pennantplc.com/upcoming-exhibition-alert-for-april-may-2024/

See also the number of upcoming exhibition events. They must be fairly optimistic about GenS' prospects.