EM CEEMEA CREDIT: TLWLN: 1Q25 trading update, time is of the essence
Tullow Oil (TLWLN; Caa2neg/CCC+neg/-)
1Q25 trading update, time is of the essence
- London-listed, Ghana centric oil & gas specialist Tullow Oil posted 1Q25 trading update. In secondary, our feeds show TLWLN 10.25 May26 charting at 86 cash price area, inside recent 75/95 range.
- Q1 prod’n in line with guidance. Hedges at 60% for FY25 expected sales (for reference, Co. had previously indicated it hedged out 60% of its 1H25 forecast production @ USD59bbl and it hedged out 55% of 2H25 forecast production at USD60bbl). Ghana’s Jubilee field is expected to go onstream in Q3. Cost base (G&A) optimisation expected to generate USD40mn in FY25.
- Co.’s FCF guidance at USD400mn with oil at USD65/bbl, of which USD380mn from asset disposals and USD50mn from overdue payments, resulting in FCF consumption from an operational perspective for FY.
- Focus on B/S strengthening shows with non-core asset disposals contributing significantly to FY FCF of USD400mn, as the Co. is targeting on-going deleverage. Net debt at end of Q1 reported at USD1.6bn, guidance is for USD1.1bn at year end.
Refinancing remains key focus. No mention of “alternative sources” but more breathing room for liquidity comes from extension of the fully drawn RCF (USD150mn) to Oct ’25, Co’s expects to repay it on cash realisation of Gabon asset sale.
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USDCAD TECHS: Trend Needle Points South
- RES 4: 1.4415 High Apr 1
- RES 3: 1.4296 High Apr 7
- RES 2: 1.4180 50-day EMA
- RES 1: 1.3906/4052 High Apr 17 / 20-day EMA
- PRICE: 1.3812 @ 08:16 BST Apr 22
- SUP 1: 1.3781 Low Apr 21
- SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 3: 1.3696 Low Oct 10 2024
- SUP 4: 1.3643 Low Oct 9 ‘24
A bearish theme in USDCAD remains intact for now. Fresh trend lows continue to highlight a resumption of the downtrend and signals scope for a continuation near-term. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Moving average studies are in a bear -mode position, highlighting a dominant downtrend. First resistance to watch is 1.4052, the 20-day EMA.
EQUITIES: Estoxx futures is paring gains
- The bid in Estoxx futures has lacked traction, after Cash Equities gapped lower on the Open, caught up with some of the price action seen in Futures.
- Estoxx futures continues to trade within that 135 points range seen last Week, less volatile to some of the US Equity sessions.
- Last Week's range of 4786.00/4921.00 (low/high) will be seen as the first support/resistance.
AUDUSD TECHS: Clears Key Resistance
- RES 4: 0.6550 61.8% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6528 High Nov 29 ‘24
- RES 2: 0.6471 High Dec 9 ‘24
- RES 1: 0.6439 Intraday high
- PRICE: 0.6424 @ 08:11 BST Apr 22
- SUP 1: 0.6370/6291 Low Apr 21 / 20-day EMA
- SUP 2: 0.6181 Low Apr 11
- SUP 3: 0.6116 Low Apr 10
- SUP 4: 0.5915 Low Apr 9 and key support
AUDUSD traded higher Monday and the pair is holding on to its latest gains . A key resistance at 0.6409, the Dec 9 ‘24 high, has been cleared. This reinforces bullish conditions and signals scope for a continuation higher near-term. Sights are on 0.6471 next, the Dec 9 2024 high. Initial key support to monitor is 0.6291, the 20-day EMA. A clear break of this EMA would be a concern for bulls.
