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Brent at 80 ? Nice, but unlikely. In any event, hbr has hedged huge production volumes at 59 so wont benefit. Good news is, if that happens, those dozybrokers wont realise the hedging price locked in and lazily re rate hbr. Hope so.
Morning Fellow Investors,
This was taken from news yesterday articles. Goldman Sachs are still very bullish for oil.
Goldman Sachs, for its part, continues to be bullish on oil and anticipates strong demand that would require OPEC+ putting another 2 million barrels per day (bpd) on the market in the third quarter, after the around 2 million bpd that the alliance and Saudi Arabia decided to return between May and July.
Even after the sell-off in oil in mid-March, Goldman Sachs said that the “big breather” was a buying opportunity for oil and continued to forecast Brent hitting $80 per barrel in the summer.
in hindsight it was a terrible mistake giving t creditors such a stake in the free float, while freezing 75% of the float for some time, for us small time investors.im sure it was deliberate and factored in thou
@Stevo12
HBR hedging - What this means to our shares in shorter and longer terms?
At the moment I believe we won't benefit from the shares until creditors / panic sells off stabilises - which I strongly believe can take us down all the way to £0.14. PMO was there already and way below at one point. I am going to hold to my shares anyway until these recover and bloom again (hopefully before end of this year).
Mrlol
Unfortunately you are incorrect. Harbour has taken our hedges as opposed to put options. Hedges are low cost but require harbour to settle the hedge of pay the difference between the hedge price and the market price at date of settlement. Put options are expensive but give you the option to take the put if prices fall below the put price, but to not exercise the put if prices rise.
Harbour are approx 50% hedged at a price which generates significant cash flows. Having this security for a couple of years until oil demand fully returns is a smart move.
Best of both worlds then. Cant argue with that, what's there not to like. Cant wait for the over hang to get sorted and we return to some normal trading during May, all being well. Have a good week everyone.
What people seem to forget that oil hedged at a set price doesn’t mean you have to use the hedge..... it just means you lose the money it cost to take out said hedge.
Therefore hedging at $60 doesn’t affect our ability to benefit from higher prices.
This is how mexicos hedges work so I assume it’s the same across the board.
https://www.bbc.co.uk/weather/coast-and-sea/tide-tables
Rgds Sft
Sauerkraut, I believe it will recover and grow stronger, way above 30p. I expect that at one point Harbour will start buying off shares out of market to limit SP violation and gain bigger control over the business. So cheer up
Like you sauerkraut I am disappointed with current sp ( I hold at 24p average).
But surely at $60 oil price most oil companies will do very well. Harbour stated that will generate net cash at $30-35 oil price. So with production at 200k/day that’s $2 billion/year. I’m not an expert so not sure what that means as far as net income/profit is concerned.
Harbour have hedged a lot at $60 and a few on this site have mentioned it as a mistake. They may be right if oil continues to rise but I’m sure they will be tight lipped if the price starts to fall back.
Harbour is now valued at about 3.6 billion. With potential of 2 billion net cash (assuming $60 dollar oil price) together with 3 billion tax advantages gained from pmo then things look very promising to me.
It is strange at the moment with this new merged company and all the creditor shares, etc, and like most on this site I don’t really know when it will settle down with the sp starting to act normally, but settle down it will.
Yes, if oil falls back significantly we will all be hammered. But if the oil stays at $60+ then you are correct, eventually this share will only be going in one direction. IMHO.
Hopefully next week will give us a more settled sp.
I'll be holding a Blue Nun over he weekend- at my peril. Asti Spumante still in the cellar. One day maybe I'll share open it with Glady Pugh and HBR 55p break-even. Heavens above. Have a pleasant weekend all.
Stevo12, I do get it but I simply say whether they are creditors or not, their aim is the same: to maximise their profits. Since the creditors are getting their shares at the bargain price of around 8p each, clearly they can sell out now at a great profit, but I believe a good proportion will not sell. You say they are looking for the next opportunity, but there is an opportunity here to make an even bigger profit if they hold on. And it will be multiples of the 8p level. As I said before, I see the price being rocky until 23 trading days roughly after 1st April, that takes us to the end of the month. Not such a problem as that means we will all be able to buy in again in the last week of April when it is payday, meaning we can average down nicely the way things are going. At some stage the price is going to rally and I'm sure none of us want to miss out on this.
Stevo, you comment that the creditors will 'not want their capital tied up in Harbour', but I disagree. Why should they mind? Their capital is tied up wherever they decide to invest. They were holders in PMO for a reasonable time, why should they decide to hold HBR for any less time? Especially if the price begins moving higher, and a dividend comes into view.....
Pearls
I don’t think you fully understand the nature and behaviour of distressed debt investors and the incredible deal they got from Harbour. Many cannot and others wont hold equity except for very short periods.
They will be very happy to exit at anywhere between 20-25p.. However their core objective is to move into their next victim. They will not want their capital tied up in Harbour.
We are only seeing the on-market transactions and there will likely be off-market sales. The creditor shares might have flushed through by end of month, but I think it might take a couple more weeks. If we expect mid to end of May for market stabilisation, any sooner will be a bonus.
Pearl, I think we still didn't see the bottom of it. Before this go permanently up above 30p we are here for a rocky ride which I believe will see SP going as low as 14p. Shedding of the creditors and issuing first audited accounts with dividends being paid will revert this trend swiftly.
I cannot see it going much lower now. Selling was large today, and the price is holding up well considering the level of selling. If the price gets too low, the arbitrage position between it and Aker for example gets too large. I think we should not assume the entire free float part of the ex creditors will be sold, quite a proportion will hold, especially if the price dips.
This is now a waiting game, unsuitable for anyone who holds the stock on ten day borrowed money basis via their stockbroker. From my own calculations, we need to allow 23 days from the start of the month approximately before the expected level of selling subsides, assuming a constant rate of selling. Today was much larger than normal, which would indicate that we may be reaching that end of selling time, sooner than expected.
I suspect this will suddenly turn, so there's no point selling now and missing the rise to more standard levels. View this as an excellent buying opportunity and average down. I will be buying more on payday.