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Tullow Oil: Reserve Replenishment Uncertainty Beyond FY 22 Makes Temporal Seniority Key.

  • ID: 5131087
  • Company Profile
  • May 2020
  • 136 pages
  • Everest Research Group
  • Tullow Oil
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FEATURED COMPANIES

  • BP
  • Chevron Corp
  • CNOOC
  • Eni
  • Equinor
  • Exxon Mobil Corp
  • MORE
Why Read?
  • Understand Tullow Oil’s reserve and production trajectory and why this makes temporal seniority particularly important, favouring the $ 21s especially following the announced sale of Tullow’s Uganda assets
  • Understand why Tullow is unlikely to restructure until at least FY 2022
  • Understand how sensitive FY 2022 liquidity is to the realised Brent crude price
  • Understand what shocks to the Brent forward curve and the reserve / production trajectory are needed to generate a high enough valuation for Tullow to cover also the $22s and $25s and generate material upside for the equity
  • Understand how much Tullow’s stake in Blocks 10 BA, 10 BB and 13T in the South Lokichar Basin in Kenya could be worth
What’s New?
  • Detailed liquidity analysis and projections - RBL commitment amortisation and capacity re-determination, including potential for re-sizing; sensitivity to Brent prices; asset sale potential
  • Financial projections, valuation (DCF and peer multiples) and sensitivities
Questions Answered
  • What would it take to break liquidity by maturity of the $ 21s and why is this unlikely?
  • What would it take to ensure sufficient liquidity for Tullow to trade through FY 2022 and beyond the maturity of the $22s?
  • Is there a case for owning the $22s regardless of FY 2022 liquidity sensitivity, whether as a call option on oil prices or as a call option on Tullow’s Kenya assets or as a call option on Tullow’s reserve replenishment beyond FY 2022 with the fallback of a potential (Publisher assumption) exchange offer with part cash repayment and part debt extension (potentially with some provision for enhanced capital structure / group structure positioning for consenting holders, whilst respecting Tullow’s indebtedness and lien covenants)?
  • Are press reports suggesting valuations for Tullow’s stake in its Kenya assets of $625m to $1,000m credible?
  • How concerned are we about post plateau reserve and production declines at Tullow’s operated fields in Ghana (Jubilee and TEN) and what are the prospects for reserve replenishment?
  • How does the RBL Facility work - commitment amortisation, capacity re-determination and prospects for renewal of the facility at or before its maturity in Nov-24?
  • Could Tullow avoid a restructuring altogether and navigate its way through its final debt maturity in 2025?
Note: Product cover images may vary from those shown
2 of 3

FEATURED COMPANIES

  • BP
  • Chevron Corp
  • CNOOC
  • Eni
  • Equinor
  • Exxon Mobil Corp
  • MORE
  • View, Variant Perception & Recommendations
  • Business Overview
  • Scenarios
  • What Went Wrong In H1 2019 & H2 2018?
  • Structural Decline?
  • Financial Projections, Valuation & Sensitivity Analysis
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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