Member Info for dan222

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.

I can't see Harbour being interested in picking up more UK assets other than if it's another Waldorf-type situation. I really hope not, anyway.

Doesn't Norway also cover 78% of investment costs? Not a tax deduction, I believe they're basically 78% partner, so take both 78% of the risk and 78% of the profit. Whereas UK government just wants 78% of the profit and none of the risk.

Unless America is perfectly happy for the SoH to remain shut. After all, it's Asia/China/Europe that stand to lose the most. US gains, not only financially but also strategically through having European and Asian countries depend on them for oil and gas.

If they are only getting debt down to 1x EBITDAX, which is what they have said, then I think they have already reached that and more. So we could assume that around 70% of 2026 cash flow will be returned to shareholders. 300 million of that is dividend; if cash flow is above 2 billion there may be over a billion available for buybacks, with debt still being reduced using the other 30% of cash flow.

Bear in mind Q1 includes only one month of closure

I don't think Harbour trades or operates through subsidiaries, does it? If not, it hopefully shouldn't be affected by the latest tax.

Might be better if they don't make it, and hopefully get to do some big buy backs from BASF at a lower price

Hopefully they will be a bit clever about buybacks and not just buy at any price. So the mix probably depends on the share price. If BASF are willing to sell there could potentially be a very large buyback, but if the share price rises I would prefer more debt repayments, even if leverage is below 1

What about Waldorf's impact on tax? Presumably it will reduce UK tax in the second half of the year, which could potentially have a big impact on cash flow. HMRC seem to have already accepted that HBR are going to save £900m tax using Waldorf's losses. I'm not sure what time period that is over though, nor whether the full benefit is only realised if the windfall tax remains in place.

EIG are no longer a major shareholder, I believe they only have around 3% now. LLOG - who knows what they will do, they may hold on or they may sell, they only have around 8% and are tied in for another 6 months. Again, not a big deal if they do sell. So that just leaves BSAF who were looking to leave oil and gas all along, it's a bit of a surprise they have held on for this long but it looks like they're willing to sell at around this price, hopefully Hbr will be able to buy a big chunk of shares from them and cancel them.

Sekforde, nice post. Additionally FCF in 2027 and 2028 should now be higher than the forecast because some good hedges will be being locked in. Will be great to see the entire market cap returned over the next few years.

I think it's the other way around, if HMRC manage to stop the merger that would set a huge legal precedent. I don't think they have much chance, but just that they're trying shows why the UK is such a difficult place to do business, and why would any business bother if they have options elsewhere.

One further point - if HMRC and the courts are involved, it's likely that things will move extremely slowly. I wouldn't expect anything relating to Waldorf to be resolved within any reasonable timescale - it takes HMRC 2 or 3 years just to reply to a letter, and I don't think the courts move quickly either.

I think HMRC are a creditor of Waldorf, and are trying to argue that the sale to Harbour will make them worse off than if Waldorf just goes bust without being sold. If Waldorf goes bust HMRC get zero, but if it's sold to Harbour and Harbour use the tax losses, HMRC are trying to argue that means they will get even less than zero due to the tax relief Harbour can claim. (in my uneducated view HMRC's argument is nonsense - what Harbour do with the assets after they buy them is up to Harbour).

Https://www.bailii.org/ew/cases/EWHC/Ch/2026/280.html

"HMRC say that the "no worse off" test will not be satisfied because, if the Plan goes ahead and is sanctioned, there will be substantial tax losses available to the wider group to be acquired by Harbour that could be used by Harbour to reduce its tax liabilities by as much as $929 million. HMRC will argue that these need to be brought into account when considering the benefits of the restructuring as compared to the Relevant Alternative. The point is also relevant to discretion and, together with the special position of HMRC that it will argue exists, HMRC will say that it is necessary to look at the overall returns to the Exchequer in both scenarios."

No point leaving the UK at the moment (as in selling the UK business - I'm not talking about the listing). Sentiment is on the floor so nobody would pay much for a UK business, better to just keep things ticking over until the next election, and in the meantime maybe pick up more UK assets cheaply if opportunities arise.

Buzzard, I think we need blackouts, unfortunately, before they sort out the North Sea. Reeves was going to bring forward the end of the windfall tax and I was optimistic that it would be scrapped, but with oil at this price there's no way they're going to get rid of it, they want the money and can't see anything beyond what benefits them politically in the short-term. If anything maybe they'll increase it.

I think Harbour is probably fairly valued if you take into account both debt and equity totalling about $15 billion, and the board's forecast of approx $1 billion cash flow - 15x doesn't seem an overly stingy valuation.

Of course, we all expect cash flow to be well beyond $1 billion, and if it is (and if that's not just a one-off) then the share price should eventually adjust accordingly. I think a $1billion reduction in debt would add around 50p to the share price, so if Harbour are paying down debt, doing large buybacks, and increasing cash flow all at the same time then the share will fly (but that's all for the future - it's not happening yet).