Shorts reduced massively. Now down to 10.91%
As far as I know you need to be on the share register on the day they go ex-rights. So if you are a holder and you sell today you will still be entitled to the rights but if you only buy TLW today you won't because you won't be on the share register until T+2 or 2 days time. If you hold TLW shares your broker should send you info in the next few days on how to take up the rights. You usually have 3 options: Do nothing; Take up some of the rights; Take up all of the rights. If you take the 2nd or 3rd option, you then pay your broker for the amount of the rights shares you want to take up at the rights price of 130 p per share in this case. Once the take up is allotted they announce a date the rights shares and ordinary shares are all amalgamated into a new float of outstanding shares. Until then you will see 2 classes of shares for TLW in your account - ord.s and rights shares.
Tullow Oil said to be close to selling North Sea pipeline to Independent Oil and Gas say sources
From DAVY (with the caveat that they are a broker to TLW): Our updated valuation for Tullow Oil is 255p per share (previously 337p). This adjusts for an underwritten $750m rights issue, the Uganda farm-down and guidance provided at the time of the FY2016 results. Management argues that the rights issue should give the group room to grow. We believe Tullow will need to demonstrate good capital allocation over the next cycle for the share price to outperform. The funds from the rights issue provide an opportunity to achieve this.
There is a strong chance the cuts are a ruse by the arabs to suck the shalers back into the game. Once they are all back up and running OPEC will flood the market again driving prices down and putting the shalers back out of business. Then cut again/flood again and repeat for a few cycles until shalers' banks will no longer deal and shalers are permanently bust. Conclusion: sinusoidal oil price cycles coming up over the next 3 - 4 yrs. Could TLW be caught out? Possibly, if refinancing/production targets/unforeseen issues coalesce at the bottom of the price cycle but if they can get the refi done, production stabilizes and no unknown, unknowns in between times then I’d suggest TLW look good for the long game player.
Tullow announced this morning that it has extended its Corporate (credit) Facility by an additional year. Strong appetite among lenders to participate in the Corporate Facility extension bodes well for this year’s refinancing of the larger Reserve Based Lending (RBL) facility, according to Davy.
The shale producers raison d'etre is too subject to volatility in the price - sooner or later most will sink - you can't run a business on this scale with such capital requirements and long horizons on the basis of one factor (poo) being favourable now and again. The OPEC will ramp production up and down until no-one wants to finance shale anymore. TLW is a good bet for the patient investor able to play a long game imo due to quality proven assets in a low-cost prod.n environment. Yes, it has high debt levels but compared to its earnings they are manageable... my home loan is 20 years based on my net disposable income - TLW's only about 8 years... what's the problem??
Yellen knows if she raises interest rates to high it would slow down the economy
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