Lemming99

 

 Here's the first version of my table plotting GKP revenue receipts Method: Cell K2, Cost pool is J2 - J12 + J32 Annual production is daily x 365 Cell L12 and L20 artificially reduced as cost pool not available Same for M12 and M20 Marcap is TVR x SP Exchange rate fixed at 1.35 Revenue e.g. I37 of $8m for 2020 is prior to additional accounting write downs Note slight variance of I22 ($102m) to official revenue receipts of $101.1m for 2020 {click spreadsheet to enlarge} link to new v0.2   I own shares in GKP, this is not investment advice. Please do your own research, I'm happy to share mine

 One of my key reasons to invest in a company is their ability to create free cash flow. At this time it's more important than ever. I do have some investments in companies that don't produce free cash flow (yet) such as Aminex, Eve Sleep and Independent Oil & Gas. I'm just doing some analysis on the companies I invest in and thought I would share the findings. Two of the companies that I'm particularly interested in are Tullow Oil and Gulf Keystone Petroleum . Those links take you to my blog posts where I'm happy to share my research (with further evidence based links to company data) Each company produces their data in a different way, using different ratios. One of my objectives for this blog post was to present companies side by side with a single % figure for their Free Cash Flow (FCF) divided into their marcap and a single % figure for their dividend divided into their marcap. I've used last year's data for most of the following companies, but for...

 Based on the average OP in Jan of $54.77 and Feb of $62.28 and what looks like it might be as high as $67 for the average in Mar, I've taken a look at the forecast and potentially booked free cash flow for Tullow oil prior to financing. Tullow has reduced its risk significantly with a $48 bbl hedged floor for 60% of their revenues in '21. At an OP of $50 they expect to make $200m of pre-financing free cash flow. Based on a potential average OP of $61.35 for the whole of Q1, it looks like Tullow will book $77.59m of free cash towards their financing obligations. They already have liquidity headroom of $900m based on their reserves based lending agreed. Back when the OP was $40 Tullow engaged with bond holders for discussions. At an OP of $50 there is no need for such discussions. For an additional $10 / bbl to $60 there is an extra $100m of FCF pre-financing expected in '21. This works out to $1 bbl = $10m FCF for the workings below. If the OP were to average $65 in Q2-Q4 t...

 Is probably what Pictet are thinking. They started well, on February 25th 2020 declaring a huge borrowing of £4.4m of shares in Tullow in the very early days of the pandemonium. The price had already started to come down but I've assumed they did this for 51.94p. What's the problem you're thinking; it's only a little bit above that now. So their next step was masterful; they bought back 90% of these shares at 11p, just 3 weeks later for 19% of the total original position. Ker ching! They've got "your" cash, well it must be someone's. Should they have bought that last 10% back they would have had a whopping £3.481m cosy profit. That's a million per week (albeit for an unlimited downside bet - can we really call this an investment?) At a push I would accept that it can be called insurance, although it makes me feel a bit more like in the movies where you see violent psychos collecting protection money so that nothing bad happens by accident you know...

Despite the old adage buy on rumour, sell on news, Tullow Oil has had a resilient day today. There were a number of factors to influence the share price; such as the large paper loss made taking all that weight off the balance sheet. This was described during the call with CEO and CFO as a non cash impairment due to the oil price. If you're not sure whether that's a good idea, ask an accounting friend next time you have a chat; whilst I'm not an accountant, I think it will help flatter the company results for years to come. We also started the day with an overnight drop in Brent, and further weakness during the day. There were a few rays of sunlight. For example the figures look ok at an oil price of $55, but free cash goes up by £100m this year based on a $10 improvement in the average OP to $65 as per the full year results '20 . There's an intense level of focus on costs and operational performance. Every barrel and every dollar matters.  Let's find $1bn down ...

 Never thought it would come to this is no doubt what Odey is thinking about his cummulative borrowings of Tullow shares. Perhaps he hasn't worked it out as he's had some successes in other areas. Despite the 120 odd changes in their short position over 5 or 6 years I found that I could search and filter through short tracker.co.uk and Tullow's list of Total voting rights to get the numbers. Methodology: The changes in the short position are exact. The share prices from Google are to within a week or so as it wasn't listing them all (hence you'll see a few records in a row with the same share price). This is the same for the total voting rights, I've broadly got the total number of shares right. I would say overall it's at least 95% accurate. It took an hour as it was (where do I find the time?) but would have taken much longer to get that last 5% accuracy. It's worth pointing out that some large financial institutions short companies in certain sectors ...