Member Info for dan222

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).

I think we're looking good for a fairly solid base of 2 billion cash flow per year going forward, unless the oil price crashes (but potentially a lot higher if oil prices are high). In the presentation Linda said that the UK losses being acquired will help cash flow from 2027, and of course LLOG will be ramping up, plus there's always the chance that the windfall tax is lifted at some point.

This year's windfall should get debt down by at least a billion. With buybacks on the way we ideally want the share price staying as low as possible, but I think the combination of increased cash flow and reduced debt will at some point get buyers interested.

'Certain' is a very strong word! Not long ago, lots of analysts were 'certain' that oil would average around $60 in 2026. Hormuz could be completely reopened today or tomorrow, then what happens to your average?

I think the other thing waiting for completion is the sale of Vietnam assets. Or has that already happened?

Dumbly, look at what she does rather than what she says. It's easy for her to talk about tie backs etc, but the reality is that any oil company would be dumb to invest anything more than the minimum in the UK at the moment, as she's still stealing any profits. It would be particularly dumb for Harbour to invest in the UK, given they have so many better options, and I think it's clear that they're not likely to do so.

Why would tie backs have anything to do with her? She's not running any oil companies. She sets tax rates, and she's set them to ensure decline.

April 21st is the date the futures contracts roll over, there's a theory that there will be a short squeeze on oil as traders will have to find physical oil for delivery to fulfil their contracts. I'm not sure whether I've double posted, my previous post seems to have disappeared, possibly because it had a link?

This is the April 21st theory (date the futures roll over, possible short squeeze on oil):

https://www.reddit.com/r/investing/comments/1skzv8l/thesis_converging_spot_and_futures_prices/

Oil price is just back to where it was before the peace talks 'broke down', as people are realising they're still ongoing.

Early days. Wait and see if a ship actually manages to load Iranian oil and make it all the way back to China (if this all lasts that long)

Hbr presumably have some cash available and should probably try to buy and cancel 20% or so from BASF, I guess it would cost about 800 million but would bring BASF down to about 20% ownership, which they could then get rid of without too much pain.

I wouldn't get involved in services companies again after losing my petrofac investment. Harbour is all I have, I'm not anywhere near selling but I'm not buying either.

With Mexico, Argentina and LLOG going full steam, the windfall tax gone, and debt down, Harbour could comfortably be throwing off at least 2 billion free cash every year. With big buybacks the share price could go well over £10

I don't think there will be anywhere near 700 million barrels of strategic reserves to replace, unless this goes on for months. Barrels are released very slowly, not all at once, and it's possible that they will still be being released (rather than replenished) even when this is all over, leading quickly to an oil glut. I'm not too optimistic on the oil price later this year, I think it will quickly come down once Hormuz is opened properly again, but hopefully for the value of Harbour shares that won't be for a long time.

I think it's very possible to foresee a scenario where the war ends in the next 2-3 weeks (Trump has even said that's what will happen), flows go back towards normal within a couple of months, and governments decide not to refill reserves. That could see the world flooded with oil by the summer. Not saying that's what will happen, but it's definitely a realistic possibility.

I agree, I think the oil price will head back down towards where it was before (60 to 70 dollars), but hopefully harbour will have paid a good chunk of its debt down and also have better hedging as a result of a few months of high prices.

£3.20

I'm not sure the big shareholders still have over 50%. BSAF have 35%, LLOG have about 8%, I don't think there is anyone else over 5%?

So we now know the price BASF will sell at. I imagine that harbours priority is to repay the bridging loan, once that's done they might be able to buy a big chunk of BASFs shares and cancel them.

Pay off bridging loan $1 billion

Dividends $300 million

Pay off further debt $700 million (and use any excess the same way)