Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Does anyone have any idea regarding Toulmont and are we expecting news soon?
appreciated Norm
Sk your posts used to be interesting when we were PMO but now Isuspet you are out and are just sour grapes. Please stop your pointless and negative posts, we are interested in ideas backed up by facts, not pessimism driven by bitterness.
As a shareholder why do you want them to pay off debt? Your equity returns are increased if the balance sheet is levered. There is obviously a safe amount of debt/leverage which is optimal risk but when we are likely going to be under 1x net debt to ebitda for 2022 the last thing this company needs to do is pay off debt. It’s cheap and efficient capital.
IMO they are going to start using that cash for buy backs and hopefully for some m&a. If I want a dividend I go buy BP or SHELL. I want these guys to go for aggressive growth and take advantage of the fact the majors are giving away cheap production to purse a green dream with horrific returns on equity.
Why not an all paper offer for RKH, the consoladation has given them some wiggle room, absorb RKH for say £200m in shares, get a US partner in who would pay some back costs and fund 50%, it would be like they got Sea Lion and the surrounding acreage for free!
LTT
Any sniff of Sea Lion going ahead will see the RKH price rocket. Why would HBR offer to buy RKH if not to develop Sea Lion? HBR are in a catch 22 here, they can't get RKH on the cheap as long as RKH are solvent (which they will be if they win the award). They could try an be sneaky and say that they are ditching Sea Lion, RKH share price would plummet, but all the licences etc would also revert to RKH. I can't see any way for HBR to do to RKH what they did to PMO. RKH is not distressed (yet).
r123 - that assumes the award goes in RKH's favour. And if so, no way they'll get the full $350m or so. Maybe half that at best based on forgone profits? And then they'll have to pay a chunk over to the arbitration funder who will take a big cut. And not to mention Italy would surely appeal. RKH would have to go after state assets a la Cairn/India. So factor in time value. Yes, HBR would have to pay a bit more, but not massively more IMO.
RHK are possibly about to get up to $350m from the Italians. HBR won't be able to buy them out for less than the award++.
Exactly LTT - ditching SL would be a big hit to their 2C. I struggle to see them doing that. At best, they'll just kick the can down the road. But even that has a hard stop some time late next year when license expires. And with Zama, well, those issues are obvious. With SL, RKH is the wrong partner and needs to be removed. And Navitas much the same. All past activity and costs on SL are sunk costs now, which is fabulous from HBR point of view. For $50-100m of HBR spend they can take 100% of SL (and the other nearby fields) by taking out RKH and starting over from scratch. Bring in a big US player, US financing, etc and voila HBR can shift the situation to themselves being fully funded to first oil rather than the other way around as currently stands.
Be interesting to see if they have paid down $300m of debt, as they paid off $200m in their first two months of trading as Harbour.
As they going to kick Navitas in to touch and bring in Talos to work with them on Sea Lion, that is IF they like what they see with Sea Lion. Kick Sea Lion in to touch, well they better have somethings else in the pipeline otherwise how can they explain losing almost 75% of there 687 mmboe 2P+2C international reserves (if you include Zama in limbo) going forward!
LTT
These are American private equity funds at the end of the day (EIG et al). One thing they will definitely be wanting is some annual cash yield.
Paying off their debt? I disagree. They are not very highly leveraged. They'll be closing out this year at < 1.0x or thereabouts. No need to be paying it all off. Some debt good. Lots of debt bad.
I can't imagine a share buyback is even allowed. Can't see the debt holders going for it, they force them to hedge so can't see them allowing using money for giving value to shareholders.
Paying off debt should be the priority, it would give the board more scope not to hedge production.
If poo doesn't drop, and you get a solid update , maybe the usual 5% rise that gets sold into.
Any mention of a share buyback or divi that many on here seem desperate for is very unlikely. It would be better for hbr be paying off their debt
With the various different share lockups expiring soon, they would be daft not to begin painting a very robust growth and value story in order to try moving the SP higher. Like you say LTT, simply stating "we are big, have scale, low debt, on a par with Aker, Lundin, etc) is not sufficient in the eyes of Mr. Market.
This is their first real show case piece of public market engagement. I'm expecting to see and hear clear and firm messages and numbers around intentions for non-UK growth (Zama, Indonesia, Sea Lion) and dividends. Hopefully they don't disappoint.
Just wondering what we can expect tomorrow.
Half year results of course, but will they talk about forward plans; a dividend; a share buy back; Zama update although that is out of their hands as Talos has sent the Mexican Gov. a Notice of Dispute; Toulmont update for sure; Navitas deal going through or not? Sea Lion, still looking over the numbers!
With share holder 6month lockup expiring end of the month, what is going to keep them from rushing for the exit? Why leave the money stagnating here while there are rich pickings elsewhere. No Harbour will have to say something or have something up there sleeve as saying "We are a big fully funded E&P on a par with the likes of Aker BP", but no real growth options with Zama on hold plus they would be crazy to drill the 1st of a 2 well commitment on block 30 until Zama is sorted!
Will be interesting to hear what Linda et all have to say as there plenty of analyst watching now, lot like when they were a private company.
LTT