Member Info for epiphany121

I'll be letting the seasonal strength play out in the coming weeks till after Christmas and I;ll be piling on puts at that time. near term - S&P could run up to 4250 to 4300, but come January, I'll play the short trade. I won't fight the inverted yield curve, the 3M-10Y in particular. Indy - there'll be some pain over the next 3 to 4 weeks, but post that period and into 2023, there'll be pain in the risk-on trade, tech in particular.
Oil jumping into the 100s will play a big part in the reversion to a bear market in stocks in 2023, but the UK O&G stocks won't participate meaningfully to the upside, IMO. Sure, HBR can get to 400+, but the UK fiscal headwinds will a major drag to meaningful outperformance of the likes of HBR/ENQ/SQZ - all IMO. In the near term though, there could be a 20 to 25% upside in UKOG shares.

L7 wrote the below and that's spot on, and I'm unsure why there is confusion on the hedge losses topic? They are accounted for directly in the income and expenditure items, and are already netted off in the taxable profits on which EPL is calculated, just like the regular 40% O&G corporation tax is.

- "On the first point. Hedging losses or gains are covered by the UK revenue minus opex summation. It doesn’t matter whether you use a realised oil price in the revenue number, or the actual revenue and the hedging loss is added to opex. The point is that the hedging component is included in the computation of the EPL. In much the same way as capex and associated tax relief.
If the view is that the hedging loss can be deducted directly from the computed EPL then I believe that view is wrong. "

The average NBP next day pricing for Q4 thus far is 99.5p, not 260p. Trading economics and most other sites gives you futures pricing, not spot pricing, and spot is all that matters for gas producers unless they're hedging with futures pricing.

Wow, suddenly Jefff writes a post without it sound like it was written like a 10-year old who can't spell Yield. The Jookie boys, or should I say the Schizo, conspiracy mongering twins, are well and truly alive posting their all-knowing daily drivel. PMSL..

" SQZ has been mentioned but maybe Ithaca is a better bet? HBR could buy Shells 30 percent stake in Cambo for not much. Ithaca has some good undeveloped fields, the costs to do so would be offset against the wft. HBR could even merge with Ithaca which might also provide a route out for Delek"

Why on earth would HBR do M&A with companies holding UK NS O&G producing assets? That would more than rival the stupidity of the UK government's fiscal policies!!!

"Sunak the ex Goldman sachs banker has a lot to answer for in destruction of Uk energy independence." - I can't agree more. Unlike the US where there are checks and balances on completely misguided fiscal policies on sectors where there is still a call on additional supplies in the face of high inflation, the UK/Europe is unfortunately picking off low hanging fruit and kowtowing to populism (hey, its great to tax O&G companies to death and it's fashionable too!!!).

The one upside is HBR can buyback more shares at these levels, as long as they speed up thir purchases at these levels, instead of waiting till this is back above £4.5 to buy more to help their large sellers (their creditors/EIG) - they did this towards the end of the buyback programme the last time around. if the WT does go up to 35% in Thursday's budget, HBR will be forced to invest (capex) a lot more here than they woul have otherwise. IMO, HBR will need to look outside the UK - diversify is the only thing that makes sense, particularly if the sunset clause is extended to 2028. Complete ******s!!!

@Oil - "every single share I can think of in every sector and the every stock market in the world!!!". That's complete BS. US shalers/oil stocks are still at multi-year highs and many like DVN/PXD/APA give fat dividends to boot. They key to coming out on top is to know the country, know the sector, know the company. There are no fiscal headwinds on the O&G sector in the US and the S&P O&G sector has hit new highs only a few days ago - there's plenty of money to be made there being long, unlike the UK/Europe !!!

KO - that's right. The fiscal policy is mind-boggling!! We first had the Kamikazi chancellor who almost caused an almost irreversible collapse of the sterling to now an overzealous government bent on shafting O&G companies on the altar of fiscal prudence. As always, the right policy is somewhere in the middle, and if the WT speculation turns out to be right on Thursday, we just need to stop investing meaningfully in the NS - we atleast have a fall-back to Malaysia, should we need to look at alternate incremental capex investments.

Does Ammu gives rat's a**e about the environment. He's stirring the pot to get his 2p lower entry price. We'll just have to wait till Thursday and find out what the real fiscal policy is - I can't say I like what's being put out there in the news forums, but we just got to get to Thursday to find out. We can only hope that just as this WT is predicated on this supposed 'windfall', a floor needs to be set on the price at which this tax is triggered. I doubt they will do this, but we can hope. An incremental 10% tax is not the end of the world!!!

@Compooter - here's the link I use.

https://www.marex.com/services/data-advisory/market-data/market-data-indices/

Hello OneDB - I hope all's well too?

The reality is that the likes of HBR/SQZ sell into the next day NBP market and below you can daily spot/next day prices for NBP for the past 3 months (publicly available). You can see that spot prices were stupendously high in August and have dropped off in October as the weather stopped co-operating and gas stockpiles built up across Europe.
From a guidance viewpoint, understandbly, they need to give futures prices as that's the only point of reference they have with regards to future prices. Certainly, the SP doesn't reflect fundamentals and I still suggest that Fiscal policies are the key culprit. HBR shouldn't certainly invest much in the UK - they need to diversify out to other regions.

DealDate TotalVolume High Low Average
11/08/22 1140000 341 327 333.3410088
12/08/22 820000 370 357 362.7987805
15/08/22 15000 376 376 376
16/08/22 2240000 405 358 378.1819196
17/08/22 955000 400 360 388.486911
18/08/22 2350000 385 370 377.9787234
19/08/22 550000 375 361 364
22/08/22 300000 490 460 483.0833333
23/08/22 2275000 485 410 460.0185714
24/08/22 475000 500 480 492.3157895
25/08/22 140000 564.5 525 542.1607143
26/08/22 475000 550 505 526.7894737
26/08/22 475000 550 505 526.7894737
29/08/22 0 0 0 0
30/08/22 1250000 500 426 449.852
31/08/22 680000 430 280 380.625
01/09/22 2810000 365 315 345.2615658
02/09/22 1495000 294.5 130 222.1471572
05/09/22 1590000 360 200 317.4496855
06/09/22 4470000 255 155 195.8322148
07/09/22 880000 240 195 222.4474432
08/09/22 2415000 360 310 340
09/09/22 1855000 375 305 333.7735849
12/09/22 1235000 354 325 340.2753036
13/09/22 1140000 390 325 336.1140351
14/09/22 2395000 387 365 380.0229645
15/09/22 960000 352 310 336.9791667
16/09/22 990000 265 206 224.5858586
19/09/22 0 0 0 211.11084
20/09/22 495000 265 245 254.3131313
21/09/22 1145000 270 240 256.7554585
22/09/22 4340000 260 245 249.843318
23/09/22 1005000 262.5 228 242.159204
26/09/22 700000 225 177 192.3214286
27/09/22 1335000 200 180 190.1853933
28/09/22 735000 232 215 224.952381
29/09/22 345000 194 185 189.7101449
30/09/22 410000 200 170 180.1829268
03/10/22 655000 178 145 164.1030534
04/10/22 520000 140 103 119.3269231
05/10/22 955000 115 75 82.82722513
06/10/22 1825000 180 130 153.9931507
07/10/22 50000 180 180 180
10/10/22 470000 185 165 173.7765957
11/10/22 1260000 176 165 169.265873
12/10/22 875000 185 172.5 176.1085714
13/10/22 630000 179 146 163.0634921
14/10/22 100000 95 85 90
17/10/22 65000 101 75 85
18/10/22 1440000 40 19 20.34722222
19/10/22 615000 60 31 46.17886179
20/10/22 1265000 110 62 88.0513834
21/10/22 1210000 95 60 83.97727273
24/10/22 2145000 46 35 41.16940559
25/10/22 1670000 47 33 37.61227545
26/10/22 375000 49 41 47.4
27/10/22 2180000 62 54 59.16055046
28/10/22 2405000 75 60 64.62889813
31/10/22 3220000 85 64 77.3742236
01/11/22 2525000 65 44 49.56188119
02/11/22 170000 88 82 86.23529412
03/11/22 575000 180 118 147.5478261
04/11/22 300000

@Compooter - I use Marex for sourcing next day NBP prices. The site works fine for me; however I don't use a VPN.

Chaps - The NBP forward prices link that OneDB posted is relevant from a hedging viewpoint, but not from a spot sales price that HBR and other gas producers like SQZ sell into. Assuming that HBR will realise 280p/therm in December is plain wrong - as far as we're aware, HBR hasn't hedged any additional production after their circa 40+p hedges for 2022/23. You need to look at NBP day ahead prices as that's the price that HBR will sell into and that was at an average of 91p/therm yesterday - this is what the unhedged gas sale price for today for HBR is!!!

" I thoroughly expect the US buyers to now stock up this afternoon as the British investors clearly don't get it." - There's no real chance of that happening - not with the UK fiscal overhang. Their O&G companies are valued a lot higher on any comparison metric vis-a-vis HBR or ENQ, but they don't have the fiscal authorities running riot and hence they at least reflect the underlying commodity moves. The UK ones are detached from that reality and could stay cheaper for some time, until fiscal policies are on the table and there's a sense that they won't get any worse OR the valuation becomes so low that even with fiscal overhang, the ROI is simply too good to ignore. Which scenario wins out is a unknown at this time.

It's the fiscal uncertainty that's holding back UK centred O&G stocks. 17th October should give the market better clarity on that front and assuming that they don't do anything overly silly (can never rule that out), we should see a buy on the news event. As someone already said on this board, the likes of HBR and ENQ must stop large scale investments in the UK NS, if the government pushes forward with this fiscally damaging raid on UK O&G companies. I won't be surprised if Harbour makes an acquisition in the next 6 months to diversify away from being a UK NS centric company.

Word has it that KK bought the lot that Rookie1 sold late last evening - he must be sitting on a couple of hundred shares!!

"Obviously it’s all just coincidences and conspiracy theory’s." Of course, they are. Instead of sitting and moaning about fiscal policies in the UK, you can go and invest in O&G companies in North America - either US or Canada. They don't have these fiscal headwinds and there's no friggin way a windfall tax will ever get passed in the US - it just won't happen. I can say with a very high degree of confidence that it won't happen in Canada either and there are plenty of good value companies out of Alberta and Saskatchewan.

Better invest there than staying stuck in the UK O&G sector and indulging in your conspiracy fantasies in anger?? That is my totally unsolicited advice!!! ;-)

VoR is spot on. For EPL purposes, in his/her example, the £450k tax bill can be completely negated by investing £500k in allowable capex as the tax rebate is 91% of the eligible capex investments = £455k. Someone was asking about the period when the eligible tax rebate can be 'claimed' - that's just down to the relevant tax year for Enquest, which is the Calendar Year.

@L7 - It's 3m USD Libor + 4% till June 2025 - currently 8.25%. Please see below from the prospectus.

Interest and fees
The rate of interest payable on the loans under the RBL is the benchmark rate plus the agreed margin
and the credit adjustment spread, if applicable.
Margin is calculated as follows:
• on and from the Issue Date to and including June 10, 2025, 4.00% per annum; and
• on and from June 11, 2025 up to and including the final maturity date, 4.50% per annum.

Always good to be shown wrong - I'll try to read this in more detail, but if IR has confirmed this, then that certainly trumps anything that I may have found during my 30 minute R&D session this morning.