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Harbour Energy (HBR) Share Forecast & Price Target

HBR Stock 12 Months Forecast (prior to recent Brent price rises):

Based on 5 Wall Street analysts offering 12 month price targets for Harbour Energy in the last 3 months. The average price target is 406.25p with a high forecast of 545.00p and a low forecast of 360.00p. The average price target represents a 40.45% change from the last price of 289.25p.

Highest

545.00p

Average Price Target

406.25p

Lowest

360.00p

https://www.tipranks.com/stocks/gb:hbr/forecast

upstream 28 march 2024

mubadala spuds key ultra-deepwater well offshore indonesia

success at tangkulo could boost touted andaman gas hub project

united arab emirates operator mubadala energy has spudded its second well on the south andaman production sharing contract offshore indonesia, where it is hoping to find additional reserves to support the exploitation of its recent ultra-deepwater layaran discovery, which has potential to be a 6 trillion cubic feet-plus gas field.

upstream regulator skk migas confirmed that mubadala on sunday had started drilling operations on the tangkulo-1 exploration well, south of layaran.

the well is located 166 kilometres northeast of banda aceh city and 67 kilometres north of lhokseumawe in aceh province, and is being drilled by seadrill’s drillship west capella.

upstream has twice attempted to contact mubadala via the portal on the company’s website for possible comment and details on tangkulo.

mubadala, its south andaman partner harbour energy and bp — which is co-venturer to both other companies on the adjacent harbour-operated andaman ii psc — are already considering options to exploit gas discovered in the area including as liquefied natural gas or potential pipeline exports to singapore, malaysia and thailand.

following december’s success at layaran — the exploration well flowed at more than 30 million cubic feet per day of gas — the west capella moved to the andaman ii block to drill wildcats on harbour’s halwa and ***o prospects. the halwa-1 well delivered low gas saturations while the ***o exploration well resulted in a small gas discovery, which was tested.

andaman ii is home to the 2022 harbour-operated timpan-1 discovery that tested at 27 mmcfd of gas and 1884 barrels per day of associated 58 degrees api condensate. halwa lies to the northeast of timpan while the recent ***o discovery is located to the southeast of timpan.

on completion of the ongoing tangkulo probe, mubadala plans to drill an appraisal well on the layaran structure, thereby adding a fifth well to the drillship’s current charter.

head of skk migas’ programme and communications division, hudi suryodipuro, said the potential for oil and gas reserves in the andaman region is still quite large, adding that the regulator continues to encourage and supervise companies operating in the region so that they can realise all their activities in accordance with the agreed 2024 work programme and budget.

co-venturers in the south andaman gross split psc are operator mubadala with an 80% interest and premier oil (harbour) on 20% while harbour has a 40% operated interest in the andaman ii psc where it is partnered by mubadala and bp with 30% apiece.

Always good to see Harbour Energy amongst the top picks:

Investors Eye Undervalued AI, Energy Sectors for Growth

Fears surrounding the inflation of stock market evaluations have resulted in investors pivoting their interest to AI companies and the energy sector. These sectors are currently viewed as undervalued, promising immense growth potential for investors who are willing to shift away from traditionally profitable markets.

German investment bank strategist, Jonathan Stubbs, suggests the U.S. and European energy sectors are at historical trading lows. He insists a aconsideration of these sectors could provide profitable opportunities for diversified portfolios amidst fluctuating oil prices and increasing reliance on renewable energy sources.

Historically, the energy sector has experienced undervalued levels only three times in the past four decades, with each instance followed by a market surge for oil and gas stock investors. These patterns suggest potentially aggressive future returns. However, they also serve as a reminder of the risks inherent in any market movement.

A recent analysis by a reputed bank used a unique measure combining price-to-earnings multiples, dividend yields, and price-to-book multiples to assess the sector’s worth, specifically highlighting the European oil and gas sector’s undervalued status. The assessment suggests the current market conditions may present an excellent opportunity for investors.

According to the bank, the trailing price/book multiples show the European energy sector to be the most affordable it’s ever been, even considering potential market volatility and uncertainties. The bank identified five “top picks” for investors wanting to diversify their energy portfolio, including Shell, TotalEnergies, Harbour Energy, Saipem, and Energean. These companies were selected based on their financial performance, growth potential, and commitment to cleaner energy sources.

Jonathan Stubbs emphasizes the energy sector’s potential for sustained investment amidst robust financial performance and strong balance sheets. This could result in continuous investor rewards and long-term returns, particularly through share buybacks. Investors seeking unique opportunities for growth might find them in the currently undervalued AI and energy sectors.

Yahoo Finance Tue, 19 March 2024

1 ex-FTSE 100 stock that I think will get promoted soon

Each quarter, the FTSE 100 and FTSE 250 have a reshuffle. Based on the rise and fall of the market cap of a stock, it could get promoted or relegated from either index. The largest companies sit in the FTSE 100. Here’s one firm that used to have a seat at the top table that I think could return shortly.

In the hot seat:

I’m talking about Harbour Energy (LSE:HBR). Back in late 2022, it was demoted out of the main index down to the FTSE 250, which is where it currently sits.

The business has been performing well recently, with the share price up 11% over the past year. Back in late December, the stock jumped on news that it had agreed to buy the upstream assets of German oil and gas producer Wintershall Dea. This gives Harbour Energy a much broader asset base around the world and will help for diversification purposes.

Habour Energy also has momentum when I consider the rising oil price. Brent crude recently hit levels not seen since last October and is above $81 per barrel right now. Should this continue to move higher into the summer, it should support higher earnings from the business.

Why promotion could be close:

From purely a numbers stand point, the stock could be due to rise up to the FTSE 100 soon. It currently has a market cap of £2.14bn. In comparison, St. James’s Place (which is in the FTSE 100) has a market cap of £2.33bn. Obviously we’ll have to wait for the final figures come the next quarterly rebalancing, but it’s clear that Harbour Energy isn’t far away.

Even if it doesn’t quite make it this time, the trajectory of the share price should mean that it will get to the top table at some point this year. Granted, past performance is no guarantee of future returns. But if the share price keeps rising, the market cap should also increase. As a result, this should help it to be in contention versus FTSE 100 stocks that are falling in value.

How it could help the share price:

One of the benefits that a promotion would bring is the buying demand from index funds. A FTSE 100 index fund has to purchase any new stock, and sell any that get demoted. This naturally acts to help the share price, at least in the short term.

Even though FTSE 250 index funds would sell Harbour Energy shares in this case, the index tracker market for the FTSE 100 is vastly larger than the FTSE 250.

Further, getting back to the FTSE 100 would give Harbour Energy more publicity and potentially open it up to new investors. For example, I know some of my friends that only want to invest in the main index.

Of course, I shouldn’t simply buy the stock because it might get promoted. Rather, this is a side benefit. The main reason I’d look to buy would be due to the fundamentals of the business. As a result, it’s a stock that I’m thinking about buying shortly.

Wintershall Dea, Aker BP increase recoverable volume estimate from Adriana oil and gas discovery in Norwegian Sea

Wintershall Dea and its partners, Petoro, Aker BP, and PGNIG, have successfully completed drilling for an appraisal well on the Adriana gas and condensate discovery in the Norwegian Sea. They are now evaluating potential development options.

The appraisal well, drilled with the Transocean Norge rig, encountered high-quality reservoirs in the primary target within the Cretaceous Lysing Formation. Following the completion of the well, the estimated recoverable volumes for the Adriana discovery have been revised upwards, from an initial 19-31 MMboe to a new estimate of 28-43 MMboe.

“Our exploration strategy, as a subsea specialist, focuses on investing in areas close to existing infrastructure, where we already have a sound understanding of the geology and potential development options. This improves the possibility of fast-tracking discoveries into new subsea developments. The promising results from the Adriana appraisal well put us in a strong position to consider potential development strategies for this discovery”, said Roy Davies, VP Exploration & Subsurface for Wintershall Dea Norway.

Key area Haltenbanken. The Adriana discovery was made in 2021, as part of a multi-level discovery including the Dvalin North gas field, which is already being developed as a subsea tie-back to the Heidrun platform via the Wintershall Dea operated Dvalin field. The discovery lies 270 km north of Kristiansund on the west coast of Norway, in the Haltenbanken area of the Norwegian Sea close to the Dvalin, Aerfugl and Skarv fields.

“This region is pivotal to our exploration and production strategy in Norway. We are currently developing the Dvalin North discovery and hold shares in several other partner-operated discoveries and development projects in the area. This includes the ongoing Idun North and Alve North developments, which are operated by Aker BP”, said Michael Zechner, Managing Director of Wintershall Dea Norway.

A planned sidetrack to appraise the deeper Sabina discovery had to be abandoned for technical reasons. The partnership will consider re-entry during 2024 or 2025. The Transocean Norge rig has now moved to the Wintershall Dea operated Maria field to commence drilling operations in relation to the Maria Phase 2 development.

OGV Energy magazine

Published: 05-03-2024

“For me, this FTSE 250 stock is a no-brainer buy!”

Harbour Energy (LSE:HBR) is the FTSE 250’s biggest oil and gas producer. And following an announcement on 21 December 2023, that it plans to acquire the worldwide assets of Wintershall Dea, I think the stock is something of a bargain.

But the shares are now changing hands for around 250p. That’s only marginally higher than before the announcement. And less than half what they were in April 2022.

Improving profitability

The declining stock price doesn’t reflect Harbour’s pre-tax earnings.

As the chart below shows, EBITDA (earnings before interest, tax, depreciation, and amortisation) was $3.9bn, in 2022.

For the six months ended 30 June 2023, EBITDA was approximately $1.4bn. This is more than the company earned for the whole of 2019, when it was valued more highly.

So what’s going on?

A massive tax bill

In May 2022, the government introduced the Energy Profits Levy (EPL) on earnings generated from the North Sea. From 1 January 2023, this was increased to 35%.

With corporation tax at 40%, this means the company is subject to a tax rate of 75% on its profits.

The EPL will apply until 31 March 2028, although if oil and gas prices fall to their 20-year average — for two consecutive quarters — it will be scrapped.

However, Brent crude is currently around 13% higher than this floor price.

Falling valuation

A common method of valuing an energy company is to compare its enterprise value (EV) — an estimate of how much someone would have to pay to buy it — with EBITDA.

EV is calculated by adding together market cap and debt, and then deducting cash.

The chart below shows that Harbour’s EBITDA/EV has been falling recently — it’s now less than one.

What does this all mean?

Wintershall has an EV of $11.2bn and during the first half of 2023, recorded an EBITDA of approximately $2.2bn. Doubling this to reflect 12 months of trading, gives a figure of $4.4bn. This implies an EV/EBITDA of around 2.5.

Based on its balance sheet at 30 June 2023, Harbour currently has an EV of $2.4bn. Multiplying its EBITDA for the first six months of 2023 by two, gives an expected result of $2.8bn for the full year.

Therefore, post-merger the group’s EV will be approximately $13.6bn. And it will have an EV/EBITDA of 1.9.

Even if investors remain sceptical and drop the group’s valuation to one, its stock market valuation should be $7.2bn. Based on the number of shares that will be in issue, this implies a share price of 335p. That’s a premium of around 34% to today’s value.

That’s why — despite the penal tax rate, its carbon-intensive footprint and its exposure to volatile commodity prices — the company’s shares appear to be a ‘no-brainer’ buy to me.

The post For me, this FTSE 250 stock is a no-brainer buy!

https://uk.finance.yahoo.com/news/ftse-250-stock-no-brainer-075900549.html

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