Member Info for xxnjr

Yes I get your general point on control N08s. LATAM is far from secure though? Not sure if Lula (Brazil) or Colombia to name two are on the same page. If anything Brazil (50% of S America) and China are forging ever stronger bonds to the specific exclusion of the US. Even though Guarulhos Sao Paulo arrivals is still over populated with JP Morgan type Americanos!

N08s - None taken my friend. Yeah I get that - the control thing. "Need" was the wrong verb. "Benefit" would have been better. But the fact of the matter is US GOA refineries are predominately configured for heavy aiui. Let's ask AI:-

"Yes, WTI (West Texas Intermediate) shale oil is refined in the US, but a significant portion is also exported due to a mismatch between domestic production and refinery configurations.

The Refining Mismatch

Production vs. Configuration: Approximately 80% of US shale production is light, sweet crude. However, nearly 70% of US refining capacity, particularly along the Gulf Coast, is designed to run more efficiently on heavy, sour crude.

Historical Investment: Long before the shale boom, Gulf Coast refiners invested billions into complex units like cokers to process heavy imports from Venezuela, Mexico, and Canada.

Refine and Export: While US refiners have added some capacity for light crude, it is often more economic to export the "excess" light shale oil and import the heavy crude their complex machines were built for.

Benefits of Venezuelan Crude

Access to Venezuelan crude is considered highly beneficial for US Gulf Coast refineries for several reasons:

Ideal Feedstock: Many Gulf Coast facilities were originally designed specifically for the "dense, sticky" characteristics of Venezuelan oil.

Economic Efficiency: Using heavy Venezuelan crude allows refiners to fully utilize their expensive coking and hydrocracking units, which are currently under-utilised or fed with more expensive alternatives.

Higher Yields: Heavy crude is essential for producing high volumes of distillate diesel and jet fuel, products that complex Gulf refineries specialize in.

Cost and Proximity: Venezuela offers a cheaper alternative to Canadian heavy oil due to lower shipping costs (shorter tanker trips vs. long-distance pipelines) and a frequent market discount....."

One could argue even an idiot by the laws of average gets it right 50% of the time.

With respect to Venezuela. Really the US does need their oil as most/all of US gulf coast refineries a configured to refine heavy crudes not that light WTI shale stuff.

"Exactly, the huge rise in the FRES SP was very predictable."

So predictable that our "genius" (IIRC) told us he sold some at considerably lower levels than today!

Well in that case "Genius" it makes sense to invest in the unloved oil space now and sell that silver and gold stuff that just maybe is in a bubble! (not a recommend to invest in TLW which still is a bit of a gamble until we know the terms).

Or rather we should say if those historic broker reports were wrong!

Jmax is guessing. Lol! Although it's a pretty reasonable guess given the volume traded today so far suggests something could be up, or imminent. So chime in with a comment now to make them look clever that takes into consideration some historic broker comments already in the public domain suggesting a debt for equity swap may be required to get a refinancing done. And if those historic brokers comments were prescient then Hey! guess what? Jmax will be forever telling us he's a genius. And if he's wrong it will be quietly forgotten.

Tman - yeah thats right (provided OP annual ave is more than $62) as

The relevant oil price thresholds for receiving these payments are:

No payment if the average annual Brent price is less than or equal to US$62 per barrel.

1.25% (net of tax) of upstream revenues if the average annual Brent price is greater than US$62 per barrel.

2.5% (net of tax) of upstream revenues if the average annual Brent price is greater than US$70 per barrel.

These payments are contingent on future production commencing and are calculated based on the average annual Brent price at that time. In its 2024 Full Year Results Presentation, Tullow included an "Uganda contingent payment value" of over $100 million when calculating its independently audited 2P NPV. Maybe that discounted NPV valuation is conservative?.....

We can most definitely criticise the abhorrent tone, name calling etc...... (everyone knows what I'm referring to) that pervades more than a few of your "contributions"!

Nobody cares Jmax!

The whole point of a discussion forum is to learn from eachother so we may together arrive at a better understanding. Rather than answering the Q, all you can do is drag up misunderstandings from the past. Quite why you need to do this (presumably for your own self gratification?) remains a mystery to the rest of this forum.

Tman - Ignore Jtwat. But to answer your Q

At $70 Brent: The payment is calculated at 1.25% of upstream revenues. Based on Tullow's guidance, this yields approximately $15 million annually at plateau production.

Above $70 Brent: The rate doubles to 2.5% of revenues. This higher percentage, combined with the higher nominal price of oil, drives the payment toward the upper guidance of $47 million if Brent averages $100.

Tman - So there is a loading and its consistent with what Kosmos suggested i.e on face value kind of 70K now BUT it's just one cargo need confirmation from a few more. And would maybe anticipate Jan more like say 65K(?) as the first 10(?) days or so was weak before the new well came on. All very approximate.

Anton - As fas as I know the terms of the Glencore arrangements have not been disclosed. That being the case I don't think we can necessarily assume the bondholders (or new bondholders) won't have sway on future hedging as part of a potential refinancing. And anyway despite Glencore deal a while back, Tullow continue to independently place hedges (although we don't know if the hedging rules are partly dictated by Glencore).

Tman - should be able to answer that within 2 to 3 days.

It was always curious that our self anointed one posted so little in the FRES forum relative to their high volume of posting here (given that nothing new was really being said - just one line repeats, or personalised attacks). It's great to see they finally seem to be spending more time in the FRES forum. Happy days :)

Boring. Nobody cares!

Kosmos have their own agenda with refinancing so need to get stuff out into the public domain. As for Tullow..... maybe the deal will get signed if/when refinancing is done but the refinancing is maybe contingent on the FPSO lease buyout. Hey-ho!!! Only 123 days to the cliff wall.

Missed the KOS news as I was on a flight to the Canaries yesterday. So if they can produce at just under 70k that would imply the GOR should go down a little bit as previous GOR precluded more than 67.5K. if that's the case (which it probably is) then that seems more promising than before. Will need confirmation from the 3rd well.

Regarding the 3 levels. Jubilee has various lobes (sand bodies) at different levels. It's a bit like 3 or 4 laurel leaves overlying each other with slightly different orientations. In some places multiple leaves line up and can be penetrated by one well. The two main producing lobes (the laurel leaves) are something like MH1 and MH5 from memory and one/both each has upper and lower producing horizons within one lobe - so there are at least 3 or even 4 existing producing horizons. Hope that visualisation helps.

Newbee007 - "Lesson to be learnt. When you are in trouble just attack another country, take over and steal their oil. Gotta love America and is moral lessons....."

Oil doesn't get stolen under the terms of PSC. The host nation ultimately owns the oil and the contractor is granted a license to produce the stuff with the revenue being shared between both parties. But to your point. What happened about 50 yrs ago was that Venezuela ripped up the existing PSC's, unilaterally nationalising the foreign operations of US big oil like Exxon and Mobil in Venezuela and still haven't paid the major part of the compensation awarded by international tribunals. Whether or not USA is now acting legally, or not is another matter.....