Member Info for Corriedog

Remember that the real results would have been $1.6bn higher without the hedging imposed significantly by the lenders.
The published results are just very good and not miles away from normal times. The press will just stoke up indignation against low comparatives rather than reporting the detail.
The ‘windfall’ sits with the $1.6bn. Who got that?

This shows that the government isn’t looking in the right place for windfall tax. We pay tax of 65%.

The folks who made the gains of $1.6bn! On the other side of our hedging will pay 19% or less if they aren’t in the UK. Who are they? Come on Kwasi. Get it right

Sorry Matt but inflation is not 25%.

And look at the gross profit in the numbers. Turnover up from £403.9m to £494.6m but gross profit only up from £15.5m to £15.9m. That means only £400k extra profit on £90m more turnover.
Order book down too.
I just don’t like the spin that a lot of listed companies do.
I would have preferred them to say that they produced a decent set of numbers but are still focused on getting the company stable for the long term. The results are not strong and hence the share price response.

Only sort of! P/e now of 6 seems too low.

However admin expenses up by 25% without any comment, unless I missed it. Why?

Also a mistake with all of the positive words and particularly on cash that they haven’t made even a nominal dividend payment of between £500k and £1m.
Hardly shows confidence that they are really confident in what they are saying.

You need to look at the enterprise value of market cap plus net debt to see how Harbour is valued ie about £3.75bn plus £1.25bn or £5bn.
The debt will be repaid by when? Next March?
At today’s share price then the enterprise value will be £3.75bn. A fall! Really?
If the enterprise value stands still then the share price will be one third higher.

Will any award not be taxable? In Italy?

Also what happens to the cash? We used to have some $300m before……..

I started to get excited at the share price movement this morning and then realised that it was all a bit pathetic. Why is this share so undervalued? More sellers than buyers for some strange reason.
When Chrysaor merged with Premier to form Harbour the share price was about 24p or equivalent to 480p. Today’s price is £1 less.
However, there has been a continuous stream of good news. Debt down a lot, shares in issue down by 5%, oil and gas price up a lot, hedging at lower prices unwinding, exchange rate improved by about 10%, decent dividend, lots of buy recommendations, Ebitda at about £3m, portfolio improving and opportunities developing.
The one negative is the windfall tax of 25% net of money spent on capex.
This is priced on the assumption that oil and gas production will disappear in about 3 years. Really? It will be needed for another 50 years.
I haven’t done the maths but £6 share price is a p/e of about 3.5.

£5.30 to £3.40 not too good!

Or as old Premier £22.00 to £3.40 if my maths is right which also was not too good.

This has only been a trader’s share rather than an investor’s share.

A current enterprise value- market cap and net debt- of under two times Ebitda. Really?

Market cap of under one year’s free cash flow.

Compare this with the valuations of cigarette companies that are also classed as companies that are dying out. And they have considerably more challenges than Enquest.

Spent about $70/75m to date in buying back shares at very good prices. Let’s hope that the price doesn’t get too high for the other $125m.
Selling seems to be slowing somewhat

It just needs to post some good half year numbers and show that it is generating cash.

I agree with you L3

I am getting angry about the wt now. Labour announce today that they want to back date the tax by five months!
We are paying tax at 65% whereas other companies pay just 19%.
We can’t use losses from when oil was under $30.
50% of our turnover is hedged. We don’t make a windfall on that.
Our share price has fallen by 40% to 15/16p in old money. Almost it’s lowest ever.
We should move our tax jurisdiction to Ireland and sell all of our North Sea production to Germany. And I am a brexiteer.
I can’t believe that ALL UK politicians are so stupid. Over tax and off go all of the wealth creators.
Try driving a car by purely solar or wind investment for the next ten years!

And bought back at great prices. Hopefully the price stays low whilst the buy back program completes.
All that is happening goes to add more long term value to a brilliant cash generator.
Gross margin better than Microsoft with opex of $15/16 and selling price of $90/110.

I don’t care about the shorters. They are trying to make 50p. I am expecting to make £7

A nice price for buy backs unless one only has a short time horizon.

Doesn’t matter unless you need to sell.

Just an opportunity to buy more cheaply.

Need to hold nerve

Today’s jump is a small example of how quickly that this will blow when it starts to adjust to its real share price. It might well go up £1 in a couple of days.

You don’t need to overthink this.

It will generate a cash profit of circa £1.7m this year after paying everything including capex and tax. It won’t have any debt.

The company is valued at just twice that number.

Warren Buffet is buying oil company shares. Why? Look at the above again.

Because of the green lobby there has been no investment or limited investment in new oil fields. The daft windfall tax just compounds the problem.

Oil and gas will be around for another thirty years at least. Probably more.

Fill your boots!

The tax rate on oil companies in Mexico has reduced from 65% to 40%