Member Info for dan222

There's no need for a vote to reduce or increase the dividend (luckily - imagine how many businesses would quickly go bankrupt if shareholders were able to vote themselves ever higher dividends).

And as you say, no cut has been announced.

Personally I would prefer Hbr to repay debt rather than pay a dividend, but I don't think there will be any significant reduction in the distributions anyway, it looks like they may replace some of the dividend with higher buybacks, which isn't a bad thing at all at current share price.

No one wants to read ai generated blog or media articles, or social media posts, and for good reason. I don't see why it's any different on a discussion board.

Sekforde I think you're probably out on your production figures. If you assume 500,000 barrels/day, which might still be generous, and approx 47 profit per barrel (60 - 13 costs) for 330 days, that gives profit of around 7.7 billion rather than your 9.7, so keeping all your other figures as they are cash flow would be around 1.3 billion.

10 years pay off at current oil price and production looks a reasonable buy to me - the oil price won't stay the same for 10 years, nor will production. Hbr are getting a lot more than just some additional production, this is a high quality foothold (more than a foothold really) to gulf of America.

If oil goes to 40, presumably gas would go below the windfall tax threshold so you could see the harbour share price rise.

Whether Hbr have overpaid is a bit of a hypothetical debate, given that the price is set and won't change. You're maybe trying to work out whether you should expect the share price to fall in the short term, as you're trading it. I think that basically just depends on what the price of oil does over the next month or two.

For those of us not trading, llog seems like a decent long term deal, on the basis that the debt isn't going to bankrupt Hbr even if oil prices go down to 40, and whenever the oil price rises Hbr should do great out it.

But bots, presumably you read through the output an pick out what you want, you don't just copy and paste whatever your AI spits out all over this board. You can if you like, I don't really care that much, but I don't see how copying and pasting from AI adds anything other than clogging up the board.

Ok no more research from AI on board, dyor as always

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Hey bp, nothing personal and sorry to pick on you, I see people posting AI everywhere now, I don't like it because the AI just makes up 'facts' and regurgitates generic analysis, but that's my own view and it's possible that I'm wrong, if you think differently don't let me put you off

I'm not saying bp's views are nonsense, all views are good to read, but he's not giving us his view, anyone can generate AI slop and it didn't mean anything just clogs up the board.

I don't have any agenda, but it's not info it's just nonsense

Bp.ornot.bp do we have to fill this board with AI slop?

In the presentation they were asked a couple of times if the dividend will be cut, and the answers avoided saying it won't be.

I think it's pretty clear that there will be a reduction in the dividend, I actually think that's a positive thing - this is a company that's finding better uses for its cash than to simply return it to shareholders. Instead, it's being used to grow the business, which will add more value for all of us. I would rather the board now focuses on bringing the debt down in preference to either dividends or buybacks, and hopefully that's what they're going to do.

"They could even have bought back 100% of HBR shares for the same price that they paid for LLOG

And the last HBR share remaining would probably have been valued at about $3 billion"

That doesn't quite work because presumably the second last share would cost $1.5 billion to buy back, the 2 before that 0.75billion each and so on..... Anyway, you can only buy a certain percentage of the traded shares, I think we worked out that they would be able to double the current buyback, but not more.

No reason why the dividend can't be maintained. Prior to the LLOG deal it's covered 2x over by free cash flow, and there would be no need to cut the dividend even if the additional debt interest is all met from existing cash flow. The only reason they might cut the dividend is if they focus more on buybacks, which would make sense with the share price where it is.

If there's some additional capex coming from the LLOG deal it'll be more than covered by the LLOG cash flow.

I think it's a great deal. Everyone saying we've paid too much is assuming $60 oil forever. That's clearly not going to be the case.

Hbr will be fine even if oil goes down to $40 or less - the lower it goes the less new production is introduced and the higher the rebound. In a couple of years when oil is $100/barrel or more cash flow will be exploding and the debt will be nothing.

34,000 barrels x 300 days x $40 = $408 million (conservatively) less tax at 23% = $314 million. This seems like a good deal - they're getting back at least something around 10% of purchase price per year, before taking into account the opportunity to double production and all the other potential benefits and synergies, but also before taking into account interest and dividends on the purchase price.

Also they've basically bought a standalone new profit centre - there won't really be anything that needs doing to integrate it into Harbour, it's a great deal straight away.

"Agree, managed decoupling sounds reasonable, then if EPL situation improves all the better, however if Mad Ed replaces Rachel from accounts with this clown at the helm, God help the UK."

Mad Ed can't do much more damage than Mad Rishi, Mad Jeremy and Mad Rachel have already done. I think the bad news is already in, which is why this is a decent investment.

I assume that is $600m/year cash flow? If so that's a 20% per year return on the purchase price. It doesn't necessarily look like a bad deal to me, good time to buy as well when oil prices are low and everyone's pessimistic. I think 2026 will probably be a year of low oil prices, but if the oil price takes off in 2027 or 2028 we should be sitting pretty.

Maybe the company will split - UK assets in one company listed in the uk, everything else in another listed in the us.

Yes it is. If buying LLOG meant taking on 4 billion of debt we wouldn't have paid 3 billion.

Harbours market cap is 7 billion - 3 billion shares plus 4 billion debt