Member Info for xxnjr

Https://www.tullowoil.com/investors/investment-case/

Not exactly the most compelling argument I've heard!

Bond offering documents over the years from Tullow define back in rights as "a reversionary interest in a lease which allows a party to a specified share of the working interest when the assignee has recovered specified costs from production".

On a positive note "Tullow Ghana’s application to explore within the Jubilee development area has since been approved by the Minister of Energy. The discussions on the Infrastructure Led Exploration (ILX) are ongoing. Tullow is currently acquiring 4D seismic data on the block."

And on TEN "The TEN field continued to suffer flow assurance challenges in 2024. This was due to the reduced temperature and pressure in the produced fluids from the wells. The Operator, TGL conducted an exercise to run and tune all the Low-Pressure Gas Compressors (LPGCs). In addition, some works were conducted on the flare valve which contributed to flare volumes. Continuous reservoir management on the TEN field was conducted to maintain or enhance production by the management of the ICVs in the wells. The Enhanced Liquid Recovery System was unavailable from January to August 2024 which impacted on the total oil production.

In 2025, the major production activities on the TEN field are planned for a brief shutdown to resolve the issue on the flare tip. In addition, the use of the Black Oil Foamer (BOF) is expected to enhance production on the field and reduce the slugging situation. Subsea inspections, corrosion management, equipment maintenance and repairs will continue in 2025."

It's worth skimming through Petrocom 2025 Outlook Report available here

https://petrocom.gov.gh/reports/

p.17 shows there is zero production from 8 of 26 oil Jubilee producers. Elsewhere amongst other things the report mentions

"TGL continued activities on the upgrade for the gas handling capacities of the equipment for gas compression in 2024. These activities include low pressure gas compressor coolers change-out and installation of lift frame for IGC cooler change-out. In addition, TGL conducted an activity to improve the performance of the water injection into the field which was targeted to increase the water injection volumes thereby reducing high gas injection needed to mitigate increasing Gas Oil Ratio (GOR)."

"There was reduction in production volumes in the month of November 2024 and was attributed to the dual riser flow trial between riser 10 and riser 11 on the Jubi lee field to mitigate slugging during oil production and the subsequent process shutdown of the oil train due to an upset caused by slugging in the HP separator. The dual flow trail was aborted and resumption of production with a single riser production."

"In 2025, the major activity expected on the Jubilee field is the planned maintenance shutdown of the field. The major driver of the shutdown aims to address the safety and integrity of the FPSO KNK (safety, ABS Class SS7, M&I and plant improvement). Due to the activities that needed to be undertaken pre- and during the shutdown, an accommodation vessel was contracted to support the activities for four (4) months. The following activities are part of the major drivers for the shutdown.

COT hatch weld repair

Maintenance and integrity activities on the LP flare KOD, TEG reboiler, TEG surge drum

Replacement of inlet gas cooler (IGC)

Seawater/Cooling medium exchangers plate replacement

PLET tieback replacement.

Other activities including the subsea inspection and repairs, UWILD, GTG engine change-out and equipment maintenance as well as corrosion management will be undertaken in 2025. The riser Tracon clamps activities are also expected to continue with the acceptance tests and installation in 2025."

Tman - these are a layman's comments but Jubilee 'associated' gas is a result of producing oil. AIUI in Jan 77,356 bopd on average emitted 206.71 mmscfd whereas in May only 61,134 bblls emitted a similar 207.26 mmscfd. As a result scf/bbll increased from 2.672 to 3,390. In other words the field, or one or more of its wells are getting gassier. Does that matter? It depends. The processing capacity of the FPSO is currently about 245 mmscfd. If GOR remained at 35% then max oil production would effectively be limited to 76,000 bopd as those barrels at GOR 35% emit 245 mmscfd the processing ceiling of the FPSO. Future new wells should held to constrain, or reverse increasing GOR. Not saying it's critical. Just something to keep an eye on.

Rhd3 - yep production not good. May not be connected but GOR has gone up since shutdown restart but it's not a constraint on processing capacity. GOR has been successfully constrained between about 27% and 32% over the last 3 yrs . First 5 months this year: 30.81%/30.95%/31.87%/34.93%/36.10%.

First time I've used it. Have now filtered one of you and for the other suggest either (i) do the same or (ii) just turn a blind eye.

option (i) may be the better choice?

Flavius - had forgotten about that. Well remembered!

TEN

Apr: 16,714 bopd

May: 14,573 bopd (hmmm!)

Jan: 77,356 bopd

Feb: 74,121 bopd

Mar: 49,026 bopd

Apr: 42,395 bopd

May: 61,134 bopd

(Tman - apologies you already understood that!)

Flavius - "It's not the "usual" infilling campaign: they're exploring deeper levels in the Jubilee field as per the outcomes of the 4D seismic campaign delivered in March. This makes the ongoing drilling more of an "exploration" rather than a regular infilling exercise."

Just as a matter of interest what geological horizons are being targeted?

Tman - Tullow have already told us the first 2 wells (the one's being drilled now) are being drilled on legacy seismic as 4D won't be ready. (I imagine that is because current wells are a w/inj + producer pair so the location of one dictates the location of other and the 1st well started drilling late May).

"Kenya plans to launch crude oil exports in 2026, with initial production ranging from 60,000 to 100,000 barrels per day."

That sort of volume would require a pipeline wouldn't it? which would take 4 yrs to build after FID? Doesn't really add up....

IRAN doesn't have many friends these days. Russia and US Corporates are perhaps more interested in rekindling past business relationships? IRAN's reception in Moscow may be less enthusiastic than they hope? Whatever IRAN is in a tight spot!

Ref the bonds yield to maturity 30%. Here's a calculator.

https://www.dividenddata.co.uk/bond-yield-calculator.py

Inputs>>> Bond Price = 85 Face value = 100 Settlement Date = todays date. Bond Maturity Date = 15/05/2026 Coupon Rate = 10.25% (Semi-annual). This returns a YTM of 30.35%

See also https://www.investopedia.com/terms/y/yieldtomaturity.asp#:~:text=A%20bond's%20yield%20to%20maturity,bond%20is%20held%20to%20maturity.

Loon1962 - It is mainly because TLW will pay you back $100 in 2026 but you can buy the bond now for $85 as it's trading subpar.

Loon1962 "Negative spin on all figures and facts for eg Didn’t realise that the 26 bonds were paying 30 % coupons . Thought it was 10 or maybe I just miss read"

I think you may have misunderstood their point which was about the yield. if you buy the bonds in the market this morning the yield is 29.9688% as quoted by Borse Frankfurt (assuming Tullow don't go bust and repay the bonds in full).

Few$$$'s - In that case you should be buying Unilever or Proctor and Gamble ;-)