gubu
15 May 2018
Re: Oil in the ground Interesting question about EVs Harry, I was just thinking about it when at Dublin airport recently.They have 26m passenger trips a year which seems insane for a small country, and watching those beautiful machines flying overhead, one every couple of minutes, it just struck me that the IC engine is very unlikely to be rendered extinct anytime soon. That was just my gut feeling. No EVs for hire at the car hire firms either as far as I could see.It is a sound proposition that the IC engine will be replaced one day, but as some guru once said you will often get into more trouble investing on the basis of a sound proposition that an unsound one. (As happened with: “Everyone needs a house…therefore property is always a good investment…”
Maybe when world consumption figures start declining I will change my mind but they seem to be rising by about 1m bopd every year. Plus much of the oil comes out of the world’s trouble spots and supply can be erratic.What I think is a pity is to see the state of some countries that have huge oil resources, Venezuela, Nigeria, Iraq etc., etc.But of course WTFDIK.
brummell
14 May 2018
Re: Oil in the ground It is quiet because all of the news has been so obviously good that it doesn't need to be repeated. There are still 3 declared shorts still making their escape and likely many more below the 0.50% declaration threshold still trying to get out. Both short buyers escaping and long buyers coming in have a shared interest in a low a shareprice.. TLW's excellent known and reported position aside the oil price is benefiting the management's dedication to reducing debt with every day. The hedges against a floor price were good security and may still have benefit. The cost is dwarfed by the benefits of the current oil price, now heading for $80. The real shareholder gains will come with the next results. when TLW reports the reduction in its debt. In the meantime those who have done their research will want to keep the secret to themselves. Shhhh.
MisterHarry
14 May 2018
Re: Oil in the ground I was thinking the same. Tullow did a good job hedging on the way down. they should be more positive and hedge less on the way up.............Gubu what is your take on EV CARS.?All I see is people buying larger conventional cars on cheap credit.
gubu
14 May 2018
Re: Oil in the ground Yes, it has gone very quiet hereHave I misread things as it seems to me that TLW does not appear to have benefited from the rise in the PoO as much as its peers?Possibly the hedging of 60% of 2018 production and 40% of 2019 at around $50 is holding it back until these positions gradually unwind. Then there are the high debt levels and the additional dilution due to the rights issue.
elliottsilverman
11 May 2018
Nay-sayers and short-termists thin on the ground now... TLW is looking stronger by the day...cheers to rational analysis, patience and a bit of help from OPEC
MisterHarry
11 May 2018
Re: Oil in the ground Anybody out there? I am feeling very alone and unloved Where is mister x or my old friend henry.
MisterHarry
10 May 2018
Oil in the ground Tullow is still on the naughty step with some of the market, that will not last. Remember Tullows assets are also climbing when oil goes up, not just the revenue it gets from production. Oil is climbing because the glut is over, not so much the Middle East. Anybody noticed any uptake on E.V. or any charging points being installed, beside the token few. Volvo have 18 months for all there models to be hybrid or E.V.
MisterHarry
04 May 2018
Rig count Will we have another 5 rigs this week just to keep the lid on. Have a good bank holiday weekend and relax. the only way is up. Maybe not as fast as we would like
brummell
03 May 2018
Re: Excellent update BG, imho TLW's chart is currently Brent's chart on uppers. It has been Brent's chart on downers for a while but the mood is changing and that "leverage" will support on the way up. The looming supply side effect of lower exploration investment has been known about all along but has been swamped by the emphasis on negative news. That effect will emerge as a fact as demand continues to grow. Whether it results in $300 oil is another matter but it must result in higher oil prices.US oil is light oil, to the extent that is usually highly flammable when it comes out of the ground and dangerous to transport by road or rail. Production is now hitting the barrier of infrastructure problems in the absence of pipelines. Light oil doesn't provide all of the refinery products that heavier crudes do so isn't a direct competitor for them across the board. All oil isn't equal but the knee jerk reaction to the low oil price has treated them as such. It is worth noting that one major customer for US light oil has been Venezuela where it has been used to dilute their very heavy crude before it can be refined. I see that Venezuela is now reduced to offering big discounts for payment in bitcoins.Add all that up and take account of still rising demand, reduced exploration and the fact that the output from fracking peaks quickly and then declines rapidly and we have what looks like a perfect environment for a rising oil price (pipelines need some time to provide a return on capital). There's many a slip twixt cup and lip of course, but imho this is a case where patience will pay off.
Big Grey
02 May 2018
Re: Excellent update All good with me thanks Brummell.So, 2.34 hit at close....this needs to hold. If my new, if somewhat novice charting skills work out, then £3.60 is on the way...fingers crossed!I note that the US imported record amounts of crude resulting in the big in inventories. The US needs huge investment in infastructure ie, lots of pipes to move oil from the fracking/well sites. This will not happen very quickly. With all the other geopolitical issues, and the on-going output cuts, the poo is, imho, only going north.Good luck
brummell
01 May 2018
Re: Excellent update When hedge fund managers start talking like this you know that they are switching their bets to the long side.[link]
brummell
01 May 2018
Re: Excellent update BG, on the recovery, I think that what we are seeing in TLW at the moment is the tail end of the institutional short sellers as they escape and that is restraining the price. You could see how it was walked down on low early volume from the outset yesterday before recovering and the same seems to be happening today. We have just three declared shorts remaining and doubtless many more below the 0.50% waterline still making their way out. The diminishing list is testament to TLW's improving prospects.The chart is strikingly similar to other oil healthy stocks, look at RDS for example since the beginning of the year or even Weir Group. They all mirror Brent over the same period. Brent was close to $75.40 earlier this morning and looks strong from both the supply and demand sides and the geopolitical issues are adding to that. As things are the recovery from the February 2018 low alone should see us to around £2.96. Longer term the recovery from the January 2016 lows of about £1 (corrected for the rights issue) promises gains that I won't even mention at this point. TLW's "leveraged play" worked against the company on the way down. Its improving fortunes will see the leverage leveraged even more on the way up imho but certainly support your £3.60.All subject to the oil price but with the increased efficiencies in the industry during the hard times oil doesn't need to get to $100 to fuel a spectacular recovery (but it could certainly get there).
brummell
01 May 2018
Re: Excellent update BG, very well thank you. I hope that you are also.
Big Grey
30 Apr 2018
Re: Excellent update If it can break £2.34, then £3.60 the next level to beat.Brummel...hope you’re well
brummell
30 Apr 2018
Re: Excellent update A few thoughts on that matter of that "other role" for the Company Secretary. This is just conjecture on my part but it makes sense to me. TLW is obviously keen on restoring its credit rating. One criticism from the credit rating agencies has been about the level of dependence on Ghana so TLW will need to diversify in order to keep them happy. We have seen signs of that in places like Jamaica etc. on the other side of the Atlantic. TLW has long been a believer in the theory that the oil bearing geology of the West African coast is mirrored on the East coast of South America and that seems to be coming to fruit. The two land masses were one in the distant past and you can still see how closely the coastlines conform. Anyway, things are steadily getting busier over that side for TLW and the management will need to be beefed up to allow for the growth. TLW is pretty close to Africa Oil and that seems to have good management, particularly in Keith Hill. Some sort of merger could be on the cards. Africa Oil's market cap is currently around £316m and the business could grow much more quickly with better access to capital. It seems well within TLW's reach, particularly if a deal were all or partly paper, and the working relationships are already established. The new team would hit the ground running to manage the business in Africa. There would be synergistic benefits for both and it would allow TLW to upgrade its management structure pretty much overnight. As I said, just conjecture but it would be a good move for both companies I think.
