Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
And that estimate does take the hedging into account.
I’m working off a breakeven of $35/boe and average price of $80/boe on a blended basis. 205,000 average daily production.
Anyway, interested to see how what kind of numbers they’re throwing off in the current market.
I think tomorrow’s results will be a blowout… in a good way.
Based on how high O&G prices have been, I’m going to go out on a limb and say HBR made more free cash flow in the first quarter than all of last year.
That could be a wild overestimate, but all the majors have had a huge Q1.
Let’s see how it plays out.
Gas prices always come down as the weather gets warmer. It's the normal cycle.
For the year to date, prices were well above 200p a therm until mid April and peaked at 480p in early March. Futures for Autumn and Winter later this year are also above 200p a therm.
So I think it's looking pretty good in terms of average pricing for the year.
I'm expecting Q1 results to be very healthy and hopefully we get a nice lift when combined with FTSE100 inclusion.
Have to agree with you there Wideboy and was going to say the same thing. KoBold will have made this decision given they are 51% owners of the JV. Maybe they thought it was better to use this summer window for surveying and analysis, then spend next summer really going after the targeted deposits.
Disappointing for shareholders right now, but I can see the logic in it.
Interesting looking at Brent & UK Gas futures today. Even with the strategic reserve release from the IEA and US, Dec-22 Brent contracts are still holding at $96.40. UK Gas is pricing in an upward trajectory even through the summer months, suggesting further tightness to come there. Winter-22 is currently at 269p per therm.
All in all, looking very good for HBR right now.
https://www.theice.com/products/219/Brent-Crude-Futures/data?marketId=5166944
https://www.theice.com/products/910/UK-Natural-Gas-Futures/data?marketId=5253319
Yep - feels like the usual post news drift has already begun. The problem with junior miners like Bluejay, is that the gaps between announcements are so long that investors end up losing interest and moving on.
Once Dundas is up and running this will be a thing of the past, but until then it will be the usual SP cycle of pump and then drift. Great for trading though if that's your thing.
Have to agree with you there. Can't see Brent below $100 for any sustained period until the Ukraine conflict gets resolved. However, that could drag on for months in the east of the country and I suspect the West won't be rushing to remove sanctions unless there is a full Russian withdrawal.
Based on the 2021 FCF breakeven rate of $35/boe and a current blended sales price of $81/boe (after taking hedges into account), HBR is making around $9.43m FCF per day and over $2.4bn per year. Obviously this is pre-dividends and debt repayments, but largely ties in with the forecast in the annual report.
Certainly helps me sleep better at night after watching some of my NASDAQ stocks get crushed yesterday...
Hi Miles - nice to reconnect and good to see you're still here. Appreciate the welcome.
Indeed I have been out of HBR for some time. My last buy was around 315p and I sold close to 400p, so a decent return for the portfolio there. The reason I sold was that I was sure oil prices were on the way down, as OPEC+ were looking to bring back production in late 2021. Also the Tolmount delay had me wondering what else was wrong with the Premier portfolio.
How wrong I was though and look where we are today. Brent above $100 and no real signs of a significant drop in price - even with the US releasing 1m barrels per day for the next six months or so.
The gas price for me is also a key reason why I bought back in today. Seems that the market is very tight and HBR will absolutely be able to benefit from this. So the stars are aligning somewhat for HBR, after what was a pretty slow and painful start (for shareholders at least) to their life on the LSE.
Interesting you note the CNOOC in relation to HBR's valuation. I need to look into it but it seems to reinforce my view that there is significant upside to the SP over the next 18 months. I also agree that more M&A activity should be on the horizon once debt levels come down further. It's clearly a focus for management and they have a history of acquiring good assets at decent prices - so let's see how things play out.
Just had a read of the report this morning and I'm back in today for 3,800 shares. Based on current Brent futures, HBR could hedge their entire production at $100+/bbl to the end of the year. Per the report, this would generate between $1.5bn - $1.7bn in FCF for the year. Crazy to think they could be debt free in 2023 if all goes well.
Can easily see 600-700p this year at these crude prices.
I tend to agree that the SEC should've picked this up way back in 2019. There's obviously some accountability on both sides here, but it appears that Barclay's has to carry the can for it. As an article pointed out last week, it's not like the bank has misled investors or knowingly gamed the system. They simply went over their shelf limit by mistake and sold more products than they should have - a stupid but genuine clerical error.
This doesn't mean that the investors who bought the products have lost money. In fact, they will likely make money out of this as Barclay's has to buy the notes back at par.
On that basis, I continue to think the SP fall is way overdone. But it does provide a great entry point for those not already invested.
https://www.fnlondon.com/articles/barclays-harshly-punished-for-trading-error-as-investment-banking-heads-south-20220401
Another interesting article and I tend to agree with the viewpoint here (i.e. this whole situation is quite overblown)
No problem - always good to share the latest information.
Interesting to see the large sell off this afternoon on above average volume. Not worried longer term but they need to come out with some PR soon to stop the bleeding.
https://www.ft.com/content/f6422619-fd92-4a32-9ffd-6bd3cfbb083c
Just out from the FT and provides some further background to the structured note issue.