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ENERGY VOICE

Harbour produced 186,000 barrels of oil equivalent per day in 2023. This is expected to fall to 150,000-165,000 boepd in 2024. Brook’s explained that planned shutdowns and deferred wells would drive this, while it also expects to complete the sale of its Vietnam asset in the first half.

Stripping out the Wintershall impact, Harbour’s production would be flat in 2025 from 2024.

Adding the deal in, though, will be transformational for Harbour. It will have around 500,000 boepd of production and triple its reserves, increasing its reserve life to eight years.

Meanwhile, opex will fall to $11 per barrel, from $18, and emissions intensity per barrel will also reduce.

It is not just a question of increasing in size, Brooks said. Harbour will emerge with “stronger credit, we expect to reach investment grade credit on completion, which will give us access to lower-cost capital for future growth”.

https://www.energyvoice.com/oilandgas/north-sea/546376/harbour-confident-in-wintershall-dea-deal-despite-sanction-concern/

Oil Markets Are Much Tighter Than Oil Prices Suggest

According to StanChart, the global oil surplus we are currently witnessing is due to seasonal weakness in the month of January.

StanChart notes that there’s been a January inventory draw in only three years since 2004, with the first month of the year averaging a build of 1.2 million barrels per day.

StanChart has predicted that this surplus is transitory and will flip into a 1.6 mb/d deficit in February.

Oil prices have continued trading in a narrow range in the new year with fears about weak fundamentals and the threat of a recession outweighing geopolitical risks. Last week, Commodity analysts at Standard Chartered argued that oil fundamentals were in better shape than the market was giving it credit for, and the market is heavily discounting geopolitical risks.

This week, Standard Chartered is back again, noting a sharp improvement in oil balances in the current year compared to 2022, suggesting the market is much tighter than current prices might imply.

According to StanChart, the global oil surplus we are currently witnessing is due to seasonal weakness in the month of January; however, the surplus this time around is much smaller than the average over the past two decades.

StanChart notes that there’s been a January inventory draw in only three years since 2004, with the first month of the year averaging a build of 1.2 million barrels per day (mb/d). January 2023 recorded a mega-surplus to the tune of 3.4 mb/d; the third largest surplus in any month over the past 20 years with only two months at the start of the pandemic posting bigger numbers. This year’s surplus appears to be significantly smaller than the average, with StanChart putting it at just 0.3 mb/d.

Even better for the bulls, StanChart has predicted that this surplus is transitory and will flip into a 1.6 mb/d deficit in February. The Energy Information Administration (EIA) is even more bullish and has forecast a 2.3 mb/d deficit.

https://oilprice.com/Energy/Crude-Oil/Oil-Markets-Are-Much-Tighter-Than-Oil-Prices-Suggest.html

26-Feb-2024

BASF and LetterOne Extend Ownership of Russian Oil and Gas Company Wintershall

BASF, the German chemical giant, and LetterOne, an investment group led by Mikhail Fridman, have decided to maintain their ownership stakes in the Russian business of the oil and gas company Wintershall Dea. This decision comes despite the ongoing sale of foreign assets to Harbour Energy, a transaction that involves the transfer of Wintershall Dea's oil and gas business to Harbour Energy. However, the deal excludes Russia-related businesses and the gas transmission business in Germany. The legal separation of these Russia-related businesses is part of an ongoing process.

The anticipated completion of the transaction involving BASF, LetterOne, and Harbour Energy is slated for the fourth quarter of 2024. The report indicates that even as the foreign assets are being divested, BASF and LetterOne will continue to be the owners of the segment of Wintershall Dea associated with Russia. This decision highlights the strategic approach taken by both entities to maintain a presence in the Russian oil and gas market.

Mario Mehren, the head of Wintershall, acknowledged the serious consequences of the withdrawal from Russia. The company is currently undergoing a restructuring process, which involves adjusting its operations and portfolio to align with the changing dynamics of the oil and gas industry. The decision to retain ownership of the Russia-related businesses signifies a commitment to maintaining a foothold in the Russian energy market despite the divestiture of certain assets.

Wintershall Dea positions itself as the largest independent producer of gas and oil in Europe, with operations spanning Norway, Germany, and Russia (in collaboration with Gazprom). The company also has a significant presence in Latin America, Egypt, and the Middle East. The ongoing restructuring is expected to streamline its operations and enhance efficiency in response to market challenges.

https://www.chemanalyst.com/NewsAndDeals/NewsDetails/basf-and-letterone-extend-ownership-of-russian-oil-and-gas-company-wintershall-25484

Harbour Energy deal compelling and surpasses expectations

HBR - the City gave the thumbs up to its $11.2bn acquisition of Wintershall.

Analysts at Jefferies said the deal was “very compelling,” while the team at Bank of America said it “surpasses expectations.”

“Harbour’s proposed acquisition with Wintershall Dea has defied market expectations of what was possible from its stated M&A ambitions,” BofA said in a research note.

“To us, diversification from the UK and its associated fiscal uncertainty was always the major route to re-rating Harbour’s muted valuation,” it added.

“Yet we acknowledge that the company has achieved a feat of such scale, necessitating the use of equity, without major dilution to existing shareholders,” it continued.

BofA pointed out that Harbour would move from near UK pure-play status down to around 25% production exposure whilst at the same time upgrading its credit metrics and reducing its cost of debt, if the proposed deal materializes.

BofA has a buy rating and 460p price target.

Barclays noted the deal marks the fourth major acquisition in the group's history and as CEO Linda Cook states is the "most transformational step yet in our journey."

It explained that a key part of the Harbour investment case has been to deliver value through acquisitions.

The bank highlighted that Harbour anticipates an increase in the dividend of 5% per share upon completion, with the "potential for additional returns" post completion over and above the base dividend.

Barclays also highlighted comments on the conference call after the deal was announced from Cook who stated that Harbour remains well placed to look for further potential opportunities, but that this needs to be done with “discipline and patience.“

Cook said on the call "nothing else could compete" with the Wintershall transaction when looking at other opportunities presented in the recent past.

Barclays rates Harbour Energy ‘overweight’ and Jefferies has a ‘buy’ rating.

Interesting trends!

Carmakers' EV Enthusiasm Fizzles Out

https://oilprice.com/Energy/Energy-General/Carmakers-EV-Enthusiasm-Fizzles-Out.amp.html

Automakers Are SHOCKED As EVs Owners Return To Gas Cars!

https://m.youtube.com/watch?v=eKMiD-RrYzg

“What is the Fair Price of HBR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.”

HBR Valuation - Today’s “Fair Value” £7.98

https://simplywall.st/stocks/gb/energy/lse-hbr/harbour-energy-shares/valuation

Zacks Industry Outlook Highlights Harbour Energy, VAALCO Energy and Capricorn Energy

https://finance.yahoo.com/news/zacks-industry-outlook-highlights-harbour-110000476.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvLnVrLw&guce_referrer_sig=AQAAACAOgpx3Q48E6PyoaKuuh1UtqzDdn88onsTqJrZAabpn3EaP3KNMmIQMueanQRD4aKpCY_ldEvHf4bLOtyqJQmuHM2klP1Aoh5Fql2apj7EVgyMiD9EgFuWGV1MeExMMvA4ZR87wy03F7MbErhznBD617Gwu-9vU1G7aonCdWSFU

“What is the Fair Price of HBR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.”

HBR Valuation - Today’s “Fair Value” £8.04

https://simplywall.st/stocks/gb/energy/lse-hbr/harbour-energy-shares/valuation

Good news for Zama?!

Mexico’s Pemex Gets Tax Relief in Presidential Decre

(Bloomberg) -- Mexico’s government exempted state-owned Petroleos Mexicanos from a series of taxes for a period of four months, effectively giving the debt-ridden company billions of dollars more in liquidity.

President Andres Manuel Lopez Obrador on Tuesday published a decree that removed so-called DUC levies on Pemex for the fourth quarter and January.

The decree follows a double-credit downgrade last Friday by Moody’s Investors Service, which warned the company could face a distressed debt exchange without continued government support. The tax relief is the latest aid for Pemex provided by Lopez Obrador, known as AMLO, who has made the revival of the company one of the central platforms of his government, which ends this year.

Read More: Pemex Bonds Fall as Moody’s Downgrade Underscores Debt Angst

Pemex debt has rallied since late last year when AMLO took the unprecedented step of putting 145 billion Mexican pesos ($8.5 billion) in the fiscal budget to help the company meet debt payments, after years of ad hoc capital injections and tax breaks to support the driller. The 2024 budget also further lowered the DUC.

Read More: Mexico’s Next Leader Will Inherit Oil Giant’s $106 Billion Debt.

https://www.bnnbloomberg.ca/mexico-s-pemex-gets-tax-relief-in-presidential-decree-1.2034266.amp.html

Bloomberg 13 February 2024

OPEC Chief Says Robust Oil Demand Makes Peak Look ‘Far Out’

OPEC’s top official said global oil demand will continue strong growth this year and a peak in consumption doesn’t appear to be on the horizon.

“We are seeing positive signs of good revisions to some parts of the global economy, most notably the United States,” OPEC Secretary-General Haitham Al Ghais told a panel at the World Governments Summit in Dubai on Tuesday. “I think talking about peak oil demand is probably something way far out.”

https://www.bloomberg.com/news/articles/2024-02-13/opec-chief-says-robust-oil-demand-makes-peak-look-far-out?leadSource=uverify%20wall

ZACKS Published on February 13, 2024

3 International Upstream Stocks Too Alluring to Resist

Post pandemic, operators in the Zacks Oil and Gas - Exploration and Production - International industry are focused heavily on cost-cutting initiatives. Together with their focus on high-quality, high-return assets, the companies are able to capture an attractive return on capital. The sector has uniformly stuck to shareholder return and long-term spending plans, driving equities higher. This positive sentiment supports the potential upside for international exploration and production firms such as Harbour Energy (HBR) , VAALCO Energy (EGY) and Capricorn Energy (CRNCY) .

ZACKS - Oil and Gas - International E&P Stocks to Buy

Harbour Energy: A pure-play upstream global oil and gas producer, Harbour Energy targets high-return, short-cycle drilling opportunities. The company's robust financial position and strict capital discipline support competitive shareholder returns and the optionality to grow inorganically. Harbour Energy's recent $11.2-billion deal to acquire substantially all of Wintershall Dea AG's upstream assets should expand its asset base significantly.The 2024 Zacks Consensus Estimate for Harbour Energy’s earnings per share indicates 5,500% year-over-year growth. Valued at around $2.6 billion, HBRIY currently carries a Zacks Rank of 2. Harbour Energy’s shares have dropped around 12.6% in a year.

https://www.zacks.com/amp/commentary/2225126/3-international-upstream-stocks-too-alluring-to-resist

Brent has once again sustainably crossed the USD $80 resistance mark and currently nicely trading at $80+ levels here while UK, European and Natural Gas prices are all also up/rallying at the moment:

https://tradingeconomics.com/commodities

Mexican tycoon Slim cites interest in more oil investments, growing stake in Talos

MEXICO CITY (Reuters) -Mexican tycoon Carlos Slim is interested in increasing his investments in the oil sector, including in U.S.-based Talos Energy's projects, after the billionaire businessman bought a stake last year in a major offshore project discovered by Talos.

The Zama oil field, believed to hold around 735 million barrels of oil, is essentially Talos Mexico's only project.

"We're involved in not just helping with drilling (services), rather we're getting involved in oil," he said, suggesting an ambition to possibly move into producing and marketing crude.

Zama's operator and largest shareholder is Pemex, with a 50.4% stake, while Talos and Carso hold 17.4%. Germany's Wintershall Dea has another 19.8%, and Britain's Harbour Energy the remaining 12.4%.

Last week, Mexico's oil regulator approved a Pemex request to modify Zama's development plan. Pemex had sought to cut the budget from more than $1.24 billion to just under $70 million and delay some related infrastructure projects.

Zama is expected to eventually pump up to 190,000 barrels per day of medium crude and associated gas.

https://www.msn.com/en-us/money/markets/mexican-tycoon-slim-cites-interest-in-more-oil-investments-growing-stake-in-talos/ar-BB1ibBvW

Oil Markets Are Much Tighter Than Oil Prices Suggest

According to StanChart, the global oil surplus we are currently witnessing is due to seasonal weakness in the month of January.

StanChart notes that there’s been a January inventory draw in only three years since 2004, with the first month of the year averaging a build of 1.2 million barrels per day.

StanChart has predicted that this surplus is transitory and will flip into a 1.6 mb/d deficit in February.

Oil prices have continued trading in a narrow range in the new year with fears about weak fundamentals and the threat of a recession outweighing geopolitical risks. Last week, Commodity analysts at Standard Chartered argued that oil fundamentals were in better shape than the market was giving it credit for, and the market is heavily discounting geopolitical risks.

This week, Standard Chartered is back again, noting a sharp improvement in oil balances in the current year compared to 2022, suggesting the market is much tighter than current prices might imply.

According to StanChart, the global oil surplus we are currently witnessing is due to seasonal weakness in the month of January; however, the surplus this time around is much smaller than the average over the past two decades.

StanChart notes that there’s been a January inventory draw in only three years since 2004, with the first month of the year averaging a build of 1.2 million barrels per day (mb/d). January 2023 recorded a mega-surplus to the tune of 3.4 mb/d; the third largest surplus in any month over the past 20 years with only two months at the start of the pandemic posting bigger numbers. This year’s surplus appears to be significantly smaller than the average, with StanChart putting it at just 0.3 mb/d.

Even better for the bulls, StanChart has predicted that this surplus is transitory and will flip into a 1.6 mb/d deficit in February. The Energy Information Administration (EIA) is even more bullish and has forecast a 2.3 mb/d deficit.

https://oilprice.com/Energy/Crude-Oil/Oil-Markets-Are-Much-Tighter-Than-Oil-Prices-Suggest.html

Harbour Energy signs services agreement with EthosEnergy

Under the contract, EthosEnergy will maintain and support Harbour Energy's light industrial gas turbines across three North Sea assets.

UK-based oil and gas company Harbour Energy has signed a five-year master service agreement (MSA) with EthosEnergy.

The deal, which has an option for extension, positions EthosEnergy as the primary service provider for the maintenance and support of Harbour Energy’s light industrial gas turbines across three North Sea production assets in the UK sector.

EthosEnergy has been associated with Harbour Energy for 15 years.

It has also worked with its predecessors Premier Oil, Chrysaor and ConocoPhillips UK North Sea during this period.

Premier Oil merged with Chrysaor in 2021 to become Harbour Energy.

In December 2022, Harbour Energy reached an agreement to acquire Wintershall Dea’s upstream oil and gas assets in a deal valued at $11.2bn (£8.88bn).

The assets covered in the acquisition are in Algeria, Argentina, Denmark, Egypt, Germany, Libya, Mexico and Norway.

https://www.offshore-technology.com/news/harbour-energy-ethosenergy-service-agreement/?cf-view&cf-closed

ENERGY VOICE

Harbour produced 186,000 barrels of oil equivalent per day in 2023. This is expected to fall to 150,000-165,000 boepd in 2024. Brook’s explained that planned shutdowns and deferred wells would drive this, while it also expects to complete the sale of its Vietnam asset in the first half.

Stripping out the Wintershall impact, Harbour’s production would be flat in 2025 from 2024.

Adding the deal in, though, will be transformational for Harbour. It will have around 500,000 boepd of production and triple its reserves, increasing its reserve life to eight years.

Meanwhile, opex will fall to $11 per barrel, from $18, and emissions intensity per barrel will also reduce.

It is not just a question of increasing in size, Brooks said. Harbour will emerge with “stronger credit, we expect to reach investment grade credit on completion, which will give us access to lower-cost capital for future growth”.

https://www.energyvoice.com/oilandgas/north-sea/546376/harbour-confident-in-wintershall-dea-deal-despite-sanction-concern/

“What is the Fair Price of HBR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.”

HBR Valuation - Today’s “Fair Value” £7.96

https://simplywall.st/stocks/gb/energy/lse-hbr/harbour-energy-shares/valuation

“With Brent rallying and now trading at USD $81+ here, HBR SP was pushed down today on extremely low trading volumes for most of the day, which as usual in UK markets makes manipulation lot easier than usual!”

Lol, I agree, and don’t know why whenever we get the newly created alias BS COVID disruptors on here it usually means that something fishy is afoot with the Shorters, hold tight for Gold by the year end.

HBR is fortunate in having numerous ongoing exploration (and development) projects amongst its current prolific assets wether in Indonesia, Mexico, Norway, UK,……along with great partners, now add to that the nicely diversified and extremely rich Wintershall Dea assets and we then have a fantastic combination which at today’s company market capitalization seems like a truly grand bargain/opportunity!

Harbour Energy: a transformational opportunity? And an exquisite dividend yield!

The word transformative is sometimes overused in investment commentary, but I don’t think it’s an exaggeration in terms of the potential impact of the Harbour/Wintershall Dea combination.

https://www.stockopedia.com/content/harbour-energy-a-transformational-opportunity-986046/

“Zama oil field is located approximately 60km off the coast of Tabasco, Mexico, in the Block 7 of Sureste Basin, Gulf of Mexico. Estimated to hold up to two billion barrels of oil-equivalent, it is considered to be one of the world’s biggest shallow-water oil discoveries in the past 20 years.”