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Rookie1 you waste of space. I seem to see you posting nonsense every time I come on here.
Can someone please ban this guy.
The amount of crap I hear from these people is just unbelievable. Zero added value, zero data and zero contribution to a reasonable discussion.
Please ban this guy
Hey everyone,
Do people consider DEC a good stock to own? I used to think that the dividend mitigated the risk but even that has been reduced.
Why is there such a huge decline in price? Comparable other Energy stocks are nowhere near this valuation. Also, the fact that the shorts have been climbing up indicates there's some skeletons in its cupboard.
Great company that is productive, humbled by eye-gouging government taxes.
HBR should claw back and cut production until these silly taxes are removed of mitigated for the risk they take.
All for diversifying to another jurisdiction. UK has become too expensive and unpredictable
We seem to be having a lot of shorts. We also seem to have a lot of people on this chat that are paid to post negative comments.
Do we have an invigilator. A lot of the posters like rookie and jefff seem to have a large number of posts, most of which are either negative or just nuts.
One has to ask if they have a job or if this is their job. A lot of the negative rhetoric started just before the shorts were put on.
Im hearing a high pitched whining sound on this board from what I assume are traders.
HBR is a solid investment. It should be part of a balanced portfolio with cash to average down. The C-suite know what they are doing. We have seasoned vets and trust that they are making moved to make sure loyal investors are getting a return on investment.
I agree with Sekford, the current and future FCF is really promising.
Jemery Grantham's view on buybacks is that you are buying out unloyal investors to later reward loyal ones whereas dividends are to reward all holders, even those who will essentially sell out after the ex-dividend date.
I encourage weak hands to fold and to take their money and leave, hopefully, gracefully, though I doubt it.
Should the WFT be changed to whatever favorable terms, HBR will slingshot. In the meantime, Im sure the C-suite are going to be have some nice updates on 10th May AGM.
DYOR
Bensi
I completely sympathize with the board on the SP. The WFT has been catastrophic for what is a profitable company.
There is a lot of talk about a price floor on energy prices if they drop. Remember that winter is coming, and gas will probably be going back up, so I think that this will be moot.
As for reduced funding going into NS oil, it may mean HBR can buy these at discount and sit on them till the government changes its mind.
I think its optimistic to think that government will do a U-turn considering that the energy sector has been ear-marked as the cash-cow that is to plug the government deficit.
In the golden age of energy prices and the idea that anyone in the sector is making money hand-over-fist, HBR was unlucky to be suckered into a taxation cul-de-sac.
I think enquest has been x5 just to drop down to x2 in share price but HBR has been consistent in its disappointment.
One silver lining. HBR has a good cash position to move into other markets but also to weather any restrictions, particularly with the cost of production being so low.
Im not interested in a low energy price. minimize the silly hedging and take a risk on maximizing future returns.
I predict a large spike in oil price soon.
HBR has been an unfortunate stock.
Whilst all companies in the energy sector were printing money, they managed to hedge themselves out of most of the upside, even worse, they managed to get themselves nationalized by the UK government, so much so, that they broke even in the last financial release.
I sympathize with a lot of shareholders. I think the BoD need to do more. HBR was a great business before the government got greedy. Im really annoyed its ended up being a shell company and vehicle for the government to collect taxes.
Hi Stevo,
Thanks for the input on this board.
Is there not a case for diversifying outside of the NS jurisdiction? I think maybe Africa or even south east Asia.
We can always fall for the "grass is greener" but i do think that the tax loss is huge.
I think the government has been punitive.... to say that Linda has thrown her toy out the pram is justified at 75%.
The government has raiding the industry and HBR is at the pointy end of this.
I do think if the government reverses some of these taxes we can see this share sky rocket. I think this is what im hoping for.
I think at the end of this year we will have a clearer picture but Im hoping for a partial reversal.
I really think we could have see a reversal to curb the industry's exodus.
Its a tough time for O&G. Being a strategic asset for most governments, it will come under strain going into a war time environment.
I do believe that this government has nationalized only the profits of companies like HBR. This is an unfortunate turn of events.
I have been reading a lot of talks about divestments, dividends over buybacks, and even speaking out against this government.
- As for divestment, I think it is prudent to do so in other jurisdictions that have low debt, or part of the "friend-shoring" axis
- For dividend vs buybacks discussion. I would stop all of that. I think divestment is important, and we should use the current cashflow to increase our position in other jurisdictions.
- As for speaking up against the government, I think, this is where politically savvy management makes a difference. Antagonizing the existing power structure is not advisable nor are big sweeping statements about punishing the UK gov are conducive to good business.
My advice to the C-suite is to cut back on maybe 20% of NS investments, even if it is at a loss, with the promise of another 20% cut the following year. The government should earn its energy security.
Alternatively, continue with investment whilst purchasing NS assets at a considerable discount.
Freeze all carbon capture investments till further notice.
HBR should re-evaluate how it invests expanding its portfolio of assets in other jurisdictions but maybe not in Europe.
In all, we should focus on the next leg of the oil cycle looking beyond this economic repression.
Having said the above, can we keep the chat a little more civil.
I think there's a lot people with differing opinions and I definitely appreciate that but we focus on communicating ideas instead of attacks.
yep. bought more of HBR along with another stock.
Looking forward to seeing what March brings by way of divis or even news of divestments away from NS or even a game-plan on mitigating this windfall tax.
I think there will be a floor under oil and gas. Those hedges are starting to look good.
@stevo12 According to the investor particulars of HBR, they:-
- wont undertake greenfield / new country exploration
- wont shift "significantly" towards oil or gas (meaning balanced portfolio 50/50)
- Over-extend its balance sheet
HBR also has 90% production from NS.
Having being shafted by the Government, it will have to break some of its promises in taking on some debt and divest away from NS.
Its policy of "seek to acquire production with undeveloped 2P reserves" is a really prudent policy.
- it minimizes the risk of exploration
- all cash is focused on extraction and process efficiency
- build up assets in multiple regions with scale (to save costs/ economies of scale)
- Majority operation control in the hands of HBR to dictate outcome of production.
HBR's focus was stability of income. Best thing for Pension funds and big institutions.
The only problem is, no one foresaw the government shake down.
If anyone is interested, this is a classic playbook described by Russell Napier as economic repression.
HBR has solid fundamentals in both boom and bust times but one cannot one foresee the lunacy of government.
to quote Jean-Baptiste Colbert
"the art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing."
https://home.kpmg/uk/en/home/media/press-releases/2022/11/budget-2022-energy-profits-levy.html
Its been an interesting week and I think there has been some interesting takes on real impact to the windfall tax.
I am slowly warming myself to hedging. I do think that in light of the 75% blow to profits, its interesting to see how this is offset.
Having said that, these taxes are set to expire in 2028 with no sunset clause should oil prices decline.
The analysis by some that the Government has been instrumental in propping up some industries at the detriment of others.
For me, one silver lining in all this is that the government is going for cash cows, and companies like HBR are profitable, liquid and have huge upward potential.
I have already averaged down and look to buying more.
With the hit taking affect across the board for north sea oil, this could be an opportunity for HBR to pick up some deals.
HBR should really try and use this opportunity to gather assets from other struggle north sea producers.
One caveat I would make is that it would be interesting to see what happens if this government rolls back some of these taxes after this gaff.
I have high hopes for this company and as many have already stated, this is a forward thinking C-suite.
caveat emptor
Bensi
Hi all,
In light of the current tax rate hike in windfall tax for the oil industry, I think HBR should start diversifying its portfolio to other jurisdictions and halt all investments in the UK.
I do think that HBR should
- invest in asset-rich indebted oil companies with high upside potential to offset its tax bill.
- stop all buybacks and dividend payouts
- roll over its hedging program but hedge at higher prices especially natural gas
- offshore assets in Africa and south/Central America look good
- Maintain investment in carbon capture
It is unfortunate that the British government has chosen a very short term view on energy security.
I do think that these tax implications will be costly and a pyrrhic victory.
I am expecting the markets will continue their decline but I dont think this will go below 240. This will give me a chance of averaging down on this share.
We dont know what the repercussions are on the geopolitical front but I do think that it Harbour energy is a good investment.
I dont think that the government should punish prudence and long term planning and I do think that we have been reckless in money printing.
I am hoping to look at a longer term year and half perspective and with good hedging (especially if prices start to fall) that HBR is, in my opinion, a good investment.
DYOR
Bensi
Welcome to the boiler room Banbury,
Theres a few things to keep in mind with this room or any other room.
- most of the time people try and talk their book
- do your own research. If someone says something, always verify then judge posts accordingly
- hearsay and speculation is always part of nation-states and narratives
- you are buying a part of a business with hopefully a return
having said that, HBR is:
- a bonafide company
- it has plenty of assets
- paying down its debt
- and good cashflow
- theres plenty of political, and environmental pressures but this is the nature of business.
HBR is in my opinion forward looking with carbon capture schemes
I do see more exposure to taxes if things take a turn in the economy
Since paying off our debt, the hedging will be less of an issue and gives us exposure to the upside and im hoping the C-suite will focus on this first
With cash comes M&A and im sure the C-Suite are already on top of this
Long run I have high hopes but we'll see.
Do your own research and all the best
Bensi
Smartie06 i think you make some ok points but not sure its sound logic.
to address your points
- Covid increase --- this will decline year on year and will spike in the winter like a common cold
- Windfall Tax --- HBR will be taxed but has exposures in different markets. UK gov has already been punished by markets over the tax cuts, they have stopped fracking and since HBR is one of the few players both for offshore drilling and owner of existing infra I think we might get hit but maybe not.
- Interest rate increase --- this is a positive for HBR, we are coming out of debt, flush with money and we might be going shopping soon.
- Collapse of markets --- We are still a value play, we might fall but not that much.
I think we may slingshot in March.
- better fitch rating (pay off more debt)
- better hedging and exposure to the energy markets
- increase in dividend payouts
- increased buybacks
- M&A probable if the market takes a turn (personally, hoping for this so I can pick up some bargains)
I think the C-suite should focus on paying off the debt and removing the ridiculous hedging we have at the moment.
We have winter coming and China is still not open.
We have world cup starting soon and China is yet to open.
Pay close attention to oil and gas demand.