Member Info for dan222

Base dividend only.

Probably $200m buyback (unless they've managed to buy a chunk from BASF by then).

Debt reduction - $1 billion term loan repaid.

Stupmy, that's Waldorf. Would be great news if that was finalised, that might be what the original poster meant?

LLOG was finalised months ago, there was an rns

Goldenbadger, in relation to hedging, the board can't predict the future oil price any more than anyone else can - it's not an exercise in trying to get the best possible price, it's done to reduce risk in case oil prices tank.

I agree on buybacks, I'm sure there are various regulations that have to be obeyed but it would seem sensible to prioritise buybacks if the share price is below a certain level, and debt repayment if the share price is above that level.

Probably not, because the share price has generally trended down rather than up for any long-term holders. Maybe now's a good time to start, if that's what you're thinking of.

Not great maths on that video, he annoyed me as he keeps assuming (for his maths) that Hormuz needs to be supplying the entirety of the world's consumption, completely ignoring that 80% + of production isn't affected in any way (and even a lot of Hormuz production is getting out via pipeline in any case).

Buzzard, if there were a takeover approach below £3 per share, hopefully the board would match the offer to BASF, and other than them I don't think most shareholders would go for it. £3.60 might swing it though.

Hopefully Harbour will buy up a big chunk of BASF shares around now.

What is the thinking around the EPL if Burnham becomes PM? I suppose at the very least it delays any decision for another few months, therefore even if EPL is lifted it won't be in this tax year - April 2027 at the earliest. Obviously if Mad Ed becomes Chancellor, then it's more likely to be extended again than lifted! Probably the worst outcome for Harbour would be if Burnham calls an early election and wins it.

Bots, if oil is going down to $50/$60, as lots of forecasters think, then it does make sense that Hbr could go back down to £2 and below. There is still a lot of debt, and this company is very much jam tomorrow rather than today - the lifting of the EPL in the UK, and increased production in Mexico, Argentina and the US are all still a few years away. Things are looking good 3 years ahead, but that's been the case for a long time with this share, and why buy now anyway if nothing much will happen for 3 years?

The other side of the argument is that this is a well-run company, no danger of going bust (barring disaster), oil prices could go up at any time as we've just seen, and you're paid a reasonable dividend to sit and wait - I've been sitting and waiting for a few years now, as have others, eventually I expect this share to come very good but who knows when that will be.

Jeffrey, interesting you say that about Wintershall, I wonder how we would be doing if we hadn't done that deal. No debt, less than half the share capital, but profit a lot lower and stuck in the UK markets.

On the assumption that things go back to normal now, how much additional post-tax profit has Harbour made due to the closure of Hormuz?

A rough estimate would be 500,000 barrels / day x 90 days x $30 additional profit per barrel x 22% (after 78% tax) = £300 million. This is a lot less than I thought before working it out. I know it's likely to be on the low side, and there will be other impacts such as better hedging, but it maybe explains why the share price hasn't risen that much.

ItalianInvestor - the share price shouldn't go back to 200 where it was before the war because Harbour has made around $1 billion additional post-tax cash due to the war, which would be about 25% of the market value at £2/share. That wasn't accounted for in the £2 share price. Additionally, there is better hedging for 2027 than there would have been without the war, plus the very real possibility that oil and gas prices will be significantly higher over the next year than they would have been, firstly because Hormuz isn't fully open yet, and secondly because stocks have been run down. Against that you can set possible demand destruction and the lifting or easing of sanctions on Iran and Russia, which seems to be the bear case.

It's fun to consider how much cash Hbr is making and may make in future, but surely nobody would claim that forecasts of 2028 cash flow are accurate, so they are meaningless for valuation purposes. Fundamentally oil bulls may think Hbr is decent value, bears will think it isn't. It may be more relevant to compare Harbour to other oil companies to see how it's valued relative to them. I think Harbour is great value, that's why I'm here, but my reasoning has not got anything to do with the 2028 cash flow forecast.

Laidback, Londoner is right. If prices spike in the second half of one year, tax payments for the spike will have a big impact on cash flow the next year. As for all the detailed forecasts for 2028 and beyond floating around, people may as well not bother. I don't think there's anyone who would have correctly predicted 2026 cash flow in 2024.

Sekforde I agree with you that there's lots of cash coming and Harbour is undervalued, but surely forecasting anything past 2027 is completely pointless? Trying to forecast 2027 is probably pointless as well - look how the figures just for 2026 have moved between $600m and over $3 billion. I think by 2028/29/30 cash flow will probably be a lot more than you're forecasting (that's why I'm invested here) but I could be wrong of course and it could be a lot less - either way trying to put a precise figure on it doesn't seem worthwhile. We can be pretty sure that the company's well-run and solvent, that's really what matters, a lot of the rest is out of everyone's hands.

Art Berman in this interview thinks oil price will settle around $100: https://www.youtube.com/watch?v=meZAqF4JLIw

Cash flow last year was $1.1 billion, that was with low oil prices and without LLOG or Waldorf. If we were to conservatively assume free cash will average $1.5 billion for each of the next few years, 70% of that would be just over $1billion/year for shareholder distributions, market cap is $5.5 billion at the current share price, so you'd be getting 18% return. I would say that repayment of debt is also a return to shareholders as it should push up the share price, including that we're going to be getting around 30% return on current share price even if oil prices fall back to the levels they were at last year, and very possibly we'll get a lot more - at some point there are going to be big dividends and huge buybacks, I hope they manage to do a monster buyback before the share price rises too much.

Big buybacks are the order of the day, while the valuation is low. It would be great if they bought back all of BSAF's remaining shares and cancelled them, at the current price.

I wonder why Blair Thomas is still chairman, and when he will go.

With the Straits still shut there is surely a good chance of an oil price spike at some point, and cash flow for the year could easily hit 3 billion. It would be great if Harbour spend around a billion buying then cancelling BSAFs shares. After issuing so many new shares in the past 3 years it's hopefully now time to start reducing the share count again.