Member Info for BaysilHope

Hi HSS well done for running the comp congrats Bacc - M&A point you made earlier here are my thoughts -IMO DYOR
In the presentation LC explains how hard it will be to extract value from M&A will inflated commodity prices. The current producing portfolio is – by definition mature – HBR M&A value accretion has been down to:
1. Extend field life – infill drilling etc
2. Defer Decom costs (from point10
3. Reduce operating costs.
Since inception HBR has extracted and extra 150mboe out of existing mature assets acquired.
In the CMD presentation and yesterdays – it’s about protecting FLAT PRODUCTION.
Profit growth next 2 years will be from static output but higher commodity prices, reduced hedging & debt reduction. Large growth projects have noticeably been parked up for 2024.
So without M&A – DEPLETION wins on the fight for output growth.
LC’s slides are 11-14 on M&A – states this investment has to compete for capital – with the following
1. Current short term Production high IRR projects
2. Debt reduction
3. Shareholder returns
Only then will M&A. qualify for capital. However – the current cash generation is SO GREAT:-
1. Debt will be repaid in 2-3 months – THAT WAS WHY LC made the remark NSS
2. Run out of existing portfolio high short cycle impact opportunities
3. Enough Shareholder returns at $500m for NOW
So the only recourse for strategic growth is M&A – it DOES NOT have competition for capital. $140bn of potential targets
1. Majors off loading
2. Companies wanting to Merge (CNE??)
3. Private Companies want out
HBR are a PE firm first – then an O&G producer – unlike PMO which has been in O&G for decades. These peeps thrive on Deals – they have global scouts with huge commissions. I don’t think HBR have any other option to grow other than M&A in the medium term 2-3 years output and reserves.
They also have CASH – no need for equity dilution, all deals to date Debt and repaid – track record. I think LC deliberated on this M&A – to warn banks Investors of a pending - large spree of spending on acquisitions. IMO DYOR GLA

M&A - listen to Linda Slide 11 she explains at length - very clearly HBR objectives.

Already Done IMO DYOR - so much on offer - with cash. We grow again. It's in the DNA - look how much time in the presentation was devoted to M&A and not Zama & Timpan - put back - and they are great oppos - world class - HBR can wait . HNY HBR has more optionality than any other mid range Oiler - Great place to be. Scale and no debt HNY

Linda - quote - mentions Debt free next few months - 13:20 minutes into the presentation -
Note it was delivered during the M&A section - & not the financials snubbing Krane - she has a hard on here for Acquisition IMO DYOR - we would have +$1.2bn free cash to play with IMO

Now that H1 has given us line of sight, EPL quantified, Capex Maxed, Debt smashed - Growth = M&A - they devoted 1 slide specially to it and $140bn of global assets up for sale.

Note Timpan - Zama slightly put on the back foot. I believe IMO - DYOR there will be a material M&A deal this year. Need to replace the 78mboe production depletion - and bolster reserves. HBR are well placed to deliver that - if debt free next 2 months - oppos all over the place for the patient. It's what we need to get to 300kboepd. HNY LC apart from being a nepo with Mr L is the right girl to get a deal done - options abound. _ Look at it they played Timpan down - as a slight I think for M&A focus on - production NOW.

Well laid out jimmy00 - that would get EBITA in H2 to $3bn, giving $5bn FYR 22 or £4.2bn or = to our Mkt Cap - Klazy valuation - EPS north of £2.70 ish mega quick calc - don't make sense. GLA

I've got wind in him - just thinking about how sensitive H2 unhedged gas will be. Waiting for the webcast to be on website to replay, I think LC did let slip - debt free in months early on. Will double check.

Totally agree.

"Excellent interim results from Harbour beat on all metrics, with financials pushing net debt lower than expectations and operations "narrowing" production guidance to the upper end of the range. Most important for stock valuation, however, is a new, increased, share buyback. It won't be the last, in our view," said Jefferies analyst Mark Wilson.

Yes I did - as it was an aside - will replay when I've calmed down. HNY Great to see the boys rewarded - living thru the absolute murder of the last 3 months, I've aged.

jakeK - As Soder & kign says Asia looks great - Big mention on M&A complete slide 11 devoted to it. Noted major Offloads or other targets $140bn to review. Point I made months ago - current production base needs circa $1bn to maintain flat production - Growth = M&A - why it jumped at me - debt gone FCF +$2.5-3bn bn, they HAVE to go for M&A to achieve consistent growth and overcome depletion. I'd say within 9-12mths. GLA MORE TO COME - H2 gas prices - see hedging slide P20 and 20 minutes in - 2022 will be a monster year. GLA

No probs- will do.

jakeK, I'm hoping for a little more colour on this in the Webcast. I'll be listening with interest - so many Majors off-loading. GLA

yep jakek - jumped at me - 'It remains our intention to grow and diversify internationally, establishing material production in at least one other region via the acquisition of high quality, conventional producing assets. We have a strong track record of executing large scale M&A and will remain disciplined and focused on strategic fit and value creation.' Definitely on to something H2 - much more to come in all areas. What's not to like.

Come on Noble - be gone. There's massive appetite - much - much more to come H2. HBR de-risked - short sellers need a much larger imagination to get stuck in - love it.

H1 EPS $1.10 or 93p, FYR +£1.80 PE ratio Actual - 2.4 nuts. Higher production guidance and far higher gas H2. EPL fears put to rest - $1bn POST TAX profit - incredible. GLA Very pleased indeed.

HBR has to manage commodity price risk through the commodity cycle on a NEW facility. The RBL demands certain minimum hedging requirements. HBR Prod'n hedged 2022 60% 2023 40% and 2024 10%. HBR has received approval from the group of lenders to remove year 3 minimum hedge requirement of 30%. Which serves the company well in the current environment. Well worth another visit in light of today's prices.

Furthermore 40% of Capex is aimed at projects delivering in excess of 50% IRR, extending field life and deferring decom charges. GLA

L3Trader - you call Tolmount the problem child at +$300 boe unhedged - what's your game man- where do you sit - are you an unhinged Noble group protestor FFS. get a grip and stop posting fake news .... what's your game man - I sound like a 70's cop.

L£T - Quote - WT changes - Britain's main oil and gas sector said it had secured some changes to a planned windfall tax but is seeking further allowances from the new Finance Minister Nadhim Zahawi, with the bill set to go through parliament on Monday.
The government changed the draft bill to set a firm end date for the levy in December 2025 and allow firms to reduce the tax by spending on decommissioning old fields and investing in the electrification of producing fields.
But OEUK also wants Zahawi to exempt smaller producers from the levy and for it to reflect the nature of investment and loss cycles in the industry which can stretch over decades.
The ministry did not immediately reply to a request for comment.

So don't understand your post.

If thats correct - US demand destruction questioned???/