LSE Soiree Butler Tullow Oil TLW.L

Tullow OilTullow Oil plc (Tullow) is an United Kingdom -based company engaged in oil and gas exploration, development and production and the sale of hydrocarbons and related activities. It operates in three geographical segments: Europe, South America and Asia; West and North Africa and South and East Africa. The Company has interests in over 100 production and exploration licences in 22 countries and focuses on four core areas: Africa, Europe, South Asia and South America.

Tullow Oil is trading above the moving 50 day average and above the moving 200 day average on above-average volume.
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  • Re: biz model rethink by acsatix
    Sun, 26 Oct 2014 08:44:00 GMT

    back of the envelope calculation

    fully loades cost per employee is about 200 k $

    about 2500'employees would mean 500 M$

    with oil output of 80k barre a day gives them about 2.3 b revenue per year.

    this means every barrel of oil has costs of about sixteen dollars just in wages loaded on them... before u pay contractors, goods, licenses, taxes, transportation, transaction travel , expat etc... By acsatix
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  • Re: biz model rethink by mrposhman
    Sun, 26 Oct 2014 03:30:00 GMT

    I think people have the wrong idea about how profitable oil fields can be, and at what stage you approach a breakeven point. As a good portion of the oil price is paid out to governments through royalties / petroleum taxes, the underlying costs of operating on oil field are quite low. The royalties / petroleum taxes are completely variable in line with oil pricing (as usually based on a fixed % of revenue) so therefore, there is a natural breakeven point if you take the fixed costs (operating costs / field and DD&A) and I don't mean fixed in a literal sense, they are fixed on a per barrel base.

    As per Tullows 2013 annual report, their operating costs were $16.5 / bbl (up from $14.6 in 2013). As a comparison Afren run at about $14, so both companies operating costs are fairly light considering the price of oil (even now). DD&A for Tullow is $17.80 / bbl, Afren don't disclose theirs but I have calculated it to be a bit higher at $23.50, the difference I think is due to the size of the developments, as Afrens are relatively small compared to Tullows.

    Overall therefore on a fixed cost / barrel, Tullow operate at $34.30 and Afren at $37.50 / barrel.

    I therefore think breakeven points are somewhere around $50 / barrel (the difference being the royalties etc).

    Offshore explorers are not about to go bust (particularly African based ones). Onshore exploration is a different kettle of fish, particularly the shale producers but offshore shouldn't be a problem. I haven't really looked too much in the North Sea based producers, may do that later but as far as I can see, companies like Afren / Tullow have a fairly large scope for lower oil prices. Even though they wouldn't go bust, obviously still far fro good for them as funding capex with decreasing cashflow will be difficult and therefore expansion plans will be shelved, but right now I don't think there is a great deal to be worried about on the oil price and cashflow generation for companies like Tullow and Afren. By mrposhman
  • Re: biz model rethink by acsatix
    Sat, 25 Oct 2014 14:13:00 GMT

    "Who knows they may end up buy out Africa Oil, apparently they have good prospects and are cheap at the moment.
    imho"

    sorry, with what money? they are lucky if they can fund operations to see the next oilfield into production... give me an update on finances as i may be ill informed. By acsatix
  • Re: biz model rethink by Edvardo
    Sat, 25 Oct 2014 12:22:00 GMT

    "it makes utmost sense for BP and the likes to not engage in bidding for depreciating assets at a time when they are disposing assets themselves! "

    Yes sure, as long as the price of oil is decreasing. BP must be disposing of assets that are giving reducing returns and spending on exploration in the hope of finding more lucrative assets located within stable fiscal regimes - eg sell Russian and Nigerian assets and explore in the North Sea for example. I do not think Tullow should sell their assets, in one or two years they will pay dividends, but it maybe a good idea to diversify by investing more in the North Sea and other less risky areas.
    Who knows they may end up buy out Africa Oil, apparently they have good prospects and are cheap at the moment.
    imho


    By Edvardo
  • Westhouse by nk1999
    Sat, 25 Oct 2014 09:49:00 GMT

    From ADVFN on Thursday:

    "Tullow Oil's share price dropped sharply on Thursday after the company reported a mixed exploration and appraisal update on Kenyan operations, though analysts at Westhouse Securities recommend investors to use this weakness as a buying opportunity. The broker maintained an 'add' rating and 930p target for the stock.

    "While exploration success in the past 12-18 months hasn't matched prior success, it still stands at >50%, which is good in the context of the sector. We would be buying into any share price weakness on the back of this update," analysts said."

    nk
    By nk1999
  • Re: punters not enjoying the rally by MisterX1
    Fri, 24 Oct 2014 21:49:00 GMT

    Now this one is a good oneon ignore - no doubt cos' commercia thought MisterX1 was talking tosh

    Yet the same reasons that we all know the sp has dived and punters have dropped them like hot cakes.bad management, poor strategy, tax disputes, dusters galore etc ..

    You could almost imagine commercial to be MisterX1 .

    ROFLMAO

    By MisterX1
  • Re: punyers not enjoying the rally by MisterX1
    Fri, 24 Oct 2014 21:44:00 GMT

    I could not contain my curiosity any further despite MisterX1's extremely busy schedule....
    Here are the infamous BB's ramper's classics :

    "I obviously can't foretell the future but it is important to remember the risk in both directions and there seem to be plenty of negative views being voiced here by those who stay silent (or go on fantasy holidays) when good news appears." bmr

    No but you made out that you did ! With all those buy recommendations from 1611 downwards....what did you think .the SP was simply going to go up ?
    Silent when "good" news appears ? What good news ? Another duster [again] but now in Kenya ?? Oh dear - if that is "good" news then I dread to think what you consider "bad"

    "I have a skin as hard and thick as a rhinoceros" bmr

    Oh deary me - and that from someone who freaked out last Xmas when MisterX1 in mirth said you need shooting in the market square ? Remember ? PC plod to be called, all manner of retribution against her to be inflicted etc. What did you think she was going to do ? Crawl through a transatlantic internet cable, and burst through your monitor in a hoody and brandishing a toy pistol ?? lol

    ROFLMAO at such tosh....



    By MisterX1
  • Re: enjoying the rally by commercia
    Fri, 24 Oct 2014 12:15:00 GMT

    I cannot stay silent it seems. hardly a personal attack brummell. I am allowed to comment on the waffle perpetrated here as some clog the discussions with topical theories that are in my opinion rubbish

    regarding your manipulation theory with TLW. Where ? what manipulation? Give a specific act(s) of manipulation? Maybe TLW management are in on it as they could perform better couldnt they?

    Have you considered the fall in price may be due to e&p’s being out of favour for quite some time now or market conditions across all sectors declining? or TLW's multiple dusters recently? Or their E&P future write-down concerns? TLW Mngt changes and their ability to deliver? Tax disputes? Uganda progress or lack of? Ghana not coming on stream till 2016 is too far out for citi to factor into the SP now? Kenyan community unrest? Or the price of oil and the impact on TLW revenues going forward? Or their debt serviceability as a result? I could add a few more reasons as to why the price is where it is today. These are not manipulations.. just a company out of favour performing badly / down on luck with a few management /geo mistakes. I should have joined the shorters rather than hold and watch the slide

    I find it astounding anyone can think there is manipulation going on when you take into account the above

    I hold tullow and am losing some but I like the potential and believe this will turn round given time. I may buy more but I tend to agree with itso, this is going lower. Im in and holding for the next 12-18 months

    Good luck
    By commercia
  • Re: biz model rethink by acsatix
    Fri, 24 Oct 2014 12:05:00 GMT

    "As for changing the business model, Tullow may do well to consider fast tracking North Sea exploration and development too. "

    by all means if they can they should develop all the fields they can ASAP if the cost per barrel is smaller than the price they can get!

    there is no time to wait for big money from competitors! competitors will just sit on the side to wait for a firesale of assets of these guys if I am right . it makes utmost sense for BP and the likes to not engage in bidding for depreciating assets at a time when they are disposing assets themselves! By acsatix
  • Re: biz model rethink by Edvardo
    Fri, 24 Oct 2014 11:55:00 GMT

    "...so really sales of assets to mayors interested in milking them down the road is becoming unlikely."

    Well maybe - but then if BP are willing to spend £7bn over the next 5 years exploring and developing North Sea oil fields, why would they not consider buying already proven fields if the price were right.

    Re:
    link

    "BP, along with co-venturers, is undertaking a £10bn investment programme in the North Sea. It has undertaken to spend more than £7bn of that sum in the next five years.

    Trevor Garlick, regional president of BP North Sea, said: "As BP marks its 50th year in the North Sea and as the industry looks to maximise economic recovery from the basin, increasing exploration activity and finding new ways to collaborate will be critical to realising remaining potential. "

    As for changing the business model, Tullow may do well to consider fast tracking North Sea exploration and development too.
    imho By Edvardo
  • Re: biz model rethink by itssoconfusing
    Fri, 24 Oct 2014 11:18:00 GMT

    guys

    Nigerian energy minister on cnbc a few days ago, negotiating on oil into a new refinery with chinese, at net back US$70/ bbl. Also something should be signed by the end of the year.

    itsso...

    Still think TLW has further on the downside IMHO By itssoconfusing
  • biz model rethink by acsatix
    Fri, 24 Oct 2014 10:12:00 GMT

    it seems like all these companies would thrive when there is more demand of oil than supply. when the equation reverses, the whole model is dreadfully shaky as they are forced to take all projects from exploration to production and this requires years of investments with no returns.
    There are indeed no buyers of more oil production capacity as this is not in need, so really sales of assets to mayors interested in milking them down the road is becoming unlikely.
    And of course funding development of fields distracts money from further exploration and so this puts a cap on potential of all these companies (basically they have to become smaller BPs / RDS with comparable costs of fixed overheads only less spread over many oild fields)

    so really I can see lots of shops closing here unless oil market equation turns back where it was some time ago...

    By acsatix
  • Re: Kenya Exploration and Appraisal Upda... by Guesstimate
    Thu, 23 Oct 2014 22:45:00 GMT

    Looking like TLW/AOI got very lucky with the Lokichar. Disappointed. Close to quitting on the whole debacle. AOI in particular doesn't have the money to fund an extensive search campaign and will be subject to painful dilution at their catastrophically low share price if they go the equity raise route.

    Thanks for your kind words, Commercia. But much good it has done me, it has to be said. By Guesstimate
  • Re: Kenya Exploration and Appraisal Upda... by Edvardo
    Thu, 23 Oct 2014 10:31:00 GMT

    "but the markets not much interested in that story…"

    Probably says more about the markets than the story imho By Edvardo
  • Re: Kenya Exploration and Appraisal Update by Doodlebugger
    Thu, 23 Oct 2014 10:22:00 GMT

    So the first of the new basin openers, Kodos, is unsuccessful. Need better luck on the next two, Epir, a bit north of Kodos, and at Engomo

    As expected the well test and appraisal continues well in the Lokichar basin, but the markets not much interested in that story…
    By Doodlebugger
  • RE: weak week. by EssexMatt
    Sat, 25 Oct 2014 21:14:14 GMT

    Early next month
  • RE: weak week. by HarryJoe
    Fri, 24 Oct 2014 17:38:34 GMT

    Thanks for that EssexMatt, when is the OPEC decision? I've a feeling these are good valve at this price.
  • RE: weak week. by EssexMatt
    Fri, 24 Oct 2014 17:04:12 GMT

    Crude prices been see sawing a bit. Think big players are probally waiting for OPEC decision before getting back in
  • weak week. by HarryJoe
    Fri, 24 Oct 2014 11:25:40 GMT

    After a big spike last Friday these hasn't shown much strength since, any ideas why?
  • The future about BRENT and WTI by tradernor
    Thu, 23 Oct 2014 10:31:39 GMT

    Insightful and bullish analysis from Seeking Alpha about Brent and WTI:

    link

  • danny by Cognito
    Mon, 20 Oct 2014 08:21:10 GMT

    Sad to see you go mate.. It happens to the best of us at times. I hope you have a fruitful week and I'll see you next weekend probably. :-) Don't forget to throw the kitchen sink at it. haha
  • danny by Cognito
    Sun, 19 Oct 2014 08:54:23 GMT

    Haha im no different lol
  • fork by Cognito
    Sat, 18 Oct 2014 20:52:45 GMT

    I knew my magic wand was long at 3 damn damn damn
  • danny by Cognito
    Sat, 18 Oct 2014 20:47:28 GMT

    Dyer? Haha mate watch out for barcs
  • joe by Cognito
    Sat, 18 Oct 2014 20:26:49 GMT

    dog did you catch it...???
  • Have a look at bp. For an example by Rigger
    Sat, 18 Oct 2014 19:53:01 GMT

    P/e 5.7. Cheap shares against earnings.
  • P/e by Rigger
    Sat, 18 Oct 2014 19:48:51 GMT

    I should add, it should never be negative.
  • P/e by Rigger
    Sat, 18 Oct 2014 19:47:47 GMT

    A ratio of ten is reasonable. Anything lower is a bargain.
  • Dannyboy by Rigger
    Sat, 18 Oct 2014 19:12:29 GMT

    The P/E ratio is still too high. Bubble.
  • RE: TLW's African Properties by tradernor
    Sat, 18 Oct 2014 18:54:42 GMT

    another article from SA about TLW:

    link