Sapan Gai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
“I now regard Harbour no longer in the doldrums within my portfolio but a gem to treasure and get a good dividend while I wait with confidence.”
@ Raydio, Good post, PI article here below is always worth a second read, especially for long suffering HBR shareholders, good times ahead.
Proactive Investors
Harbour Energy deal compelling and surpasses expectations
Harbour Energy PLC (LSE:HBR)’s share price climbed a further 5% on Friday as 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.
https://www.proactiveinvestors.co.uk/companies/news/1036996/harbour-energy-deal-compelling-and-surpasses-expectations-1036996.html?rel=scroll
UK publishes a “blueprint” for becoming a carbon capture leader
Gustavo Baquero, executive VP of strategy, business development and energy transition, at Harbour Energy, which is leading the Viking project said: “It is important that momentum is maintained and the selection of the anchor emitters to individual clusters are assigned as quickly as possible, which will enable businesses like Harbour to make vital investment decisions to help enable the UK to meet its legally binding emissions reduction targets.”
https://www.thechemicalengineer.com/news/uk-publishes-a-blueprint-for-becoming-a-carbon-capture-leader/
Proactive Investors
Harbour Energy deal compelling and surpasses expectations
Harbour Energy PLC (LSE:HBR)’s share price climbed a further 5% on Friday as 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.
https://www.proactiveinvestors.co.uk/companies/news/1036996/harbour-energy-deal-compelling-and-surpasses-expectations-1036996.html?rel=scroll
Had a small holding here, checked out today and moved the relating investment to HBR which is about to join the big boys as an O&G major post what some call “deal of the century” by Linda Cook and team. I still like ENQ but prefer HBR as a safer longer term buy and hold eventually moving into the FTSE 100, I certainly wish all the best for ENQ shareholders.
Mega analysts upgrades along with significantly raised price targets here will start rolling in post the holidays early in the New Year while any remaining Shorts will aim to close positions before then, HBR now is going to be of a size that will certainly interest US/Global investors, especially while it remains massively undervalued/oversold as current lowball valuation will not last long.
Financial Times - Harbour Energy/Wintershall: minnow lands transformational deal
Purchase reverses UK oil and gas producer out of a strategic cul-de-sac
Often companies seeking transformational deals must pay up. Harbour Energy has managed to transform itself on the cheap.
The UK oil and gas producer, which before Thursday had an enterprise value of £2.4bn, will buy Wintershall Dea’s much larger business from BASF and investment firm LetterOne. It will pay an enterprise value of $11.2bn. In one swoop, it will more than double its scale, diversify its business, acquire assets cheaply and retain management control.
The deal reverses Harbour out of a strategic cul-de-sac. From a 190,000 barrel a day (boe/d) minnow, it will swell into a 500,000 boe/d proper sized fish — a peer with Aker BP and the US’s Apache. It will reduce its reliance on the choppy UK North Sea to some 40 per cent, down from virtually 100 per cent today, while adding productive Norwegian assets.
Net debt does jump from very little to $7bn-$8bn, given the added scale. Yet with the added cash flow the combined entity achieves investment grade, up from Harbour’s current BB rating.
The deal makes financial sense for Harbour shareholders. To begin with, they are not actually paying $11.2bn for Wintershall’s assets. The cash portion is only $2.15bn. Another $4.9bn is the face value of Wintershall debt, probably worth even less today given higher rates. The balance is 921.2mn newly issued shares, worth $2.7bn at Harbour’s undisturbed share price.
In sum, BASF and LetterOne receive about $9.5bn at the market value of the securities, roughly twice current year ebitda, or $8.6 for each barrel of 2P reserves. Not much, given the quality of Wintershall’s Norwegian production. Aker BP paid more than $20 a barrel for Lundin’s, much more oily, 2P Norwegian reserves back in 2022. Harbour’s shares jumped a fifth on the news.
Yet for BASF the deal makes strategic sense. It has long sought to exit from Wintershall, of which it owned 73 per cent. LetterOne blocked a share listing in 2022. It may be happy to have found safe harbour for Wintershall. Its bidder’s shareholders will agree.
https://www.ft.com/content/0d1dd803-4e28-44e4-9345-24142285e8cc
The Acquisition is expected to transform Harbour into one of the world's largest and most geographically diverse independent oil and gas companies, adding material gas-weighted portfolios in Norway and Argentina and complementary growth projects in Mexico. Harbour will also benefit from an increased reserve life and improved margins with lower operating costs and greenhouse gas ("GHG") intensity.
Harbour is expected to receive investment grade credit ratings and to benefit from a significantly lower cost of financing resulting from the porting of existing euro denominated Wintershall Dea bonds with a nominal value of c.$4.9 billion[4] (the "Wintershall Dea Bonds") and a weighted average coupon of c.1.8 per cent. The Acquisition is also accretive to Harbour's free cash flow, supporting enhanced and sustainable shareholder returns.
Transforms Harbour's scale and geographic diversification
- Combined production of over 500 kboepd[5] and 2P reserves of 1.5 bnboe[6]
- Significant production of c.170 kboepd[7] in Norway with additional material positions in Argentina, Egypt and Germany
- Combined revenue of $5.1 billion and EBITDAX of $3.7 billion for six months to end June 2023
§ Adds high quality assets which are accretive to Harbour's reserve life and margins
- Increases Harbour's 2P reserve life[8] to c.8 years with organic reserve replacement opportunities from c.1.5 bnboe[9] of combined 2C resources
- Enhances Harbour's natural gas-weighting with combined natural gas production of over 300 kboepd[10] (c.60 per cent of total production)
- Materially accretive to margins with lower combined opex[11] of c.$11/boe and exposure to advantaged markets (Brent for oil and TTF for European gas)
§ Supports Harbour's energy transition goals
- Step change in Harbour's GHG emissions intensity, with lower combined GHG emissions intensity of c.15 kgCO2e/boe[12]
- Strong pipeline of European CCS projects with potential to store more than 10 mtpa of CO2 (net equity share)
- Harbour's 2035 Net Zero commitment reaffirmed[13]
§ Significantly enhances Harbour's financial strength
- Material financial synergies with porting of existing Wintershall Dea Bonds with a nominal value of c.$4.9 billion, a weighted average coupon of c.1.8 per cent and weighted average maturity of c.4.5 years
- Post completion, Harbour expects to receive investment grade credit ratings, increasing its access to low cost, diverse sources of capital
- Significantly increases Harbour's per share free cash flow[14]
§ Enables enhanced and sustainable shareholder returns framework
- Supports an increase in Harbour's annual dividend from $200 million to c.$455 million, of which c.$380 million will be paid to holders of ordinary shares in Harbour ("Ordinary Shares"). This reflects a 5 per cent increase in dividend per Ordinary Share to 26.25 cents[15]
- High quality portfolio, free cash flow accretion and significantly enhanced financial s
“Fantastic, and extremely smart move. The SP recovery rally here hasn't even yet started, HBR has potential to more than double it's market cap from here, Carlos has done well, let's see what updates we will now get from Mexico and Norway assets.”
Spot on, and now surely £5+ coming here in Q1 along with higher O&G prices, expiring hedges along with more drilling updates, GLA.
Outstanding update/news, absolutely no more reserves concerns here, and that’s not even counting recent Indonesia gas find and whatever else is yet to come!
Well done Harbour Energy Team, and thank you!
UK and European Gas prices nicely up once again here today:
https://tradingeconomics.com/commodities
‘huge milestone’ for regional energy security: mubadala makes indonesia ultra-deepwater discovery
layaran has potential for more than 6 tcf of gas-in-place
partners are understood to already be considering exploitation options for their recent andaman sea gas discoveries, including liquefied natural gas or potential pipeline volumes to singapore, malaysia and thailand.
mubadala’s layaran-1 exploration well encountered an extensive gas column with a thickness of more than 230 metres in the oligocene sandstone.
“this is… a huge milestone for indonesia’s and southeast asia’s energy security.”
the positive outcome from the layaran-1 discovery will de-risk multi-trillion cubic feet of prospective gas resources in the area, according to mubadala, which added it provides a foundation for future organic growth and additional exploration drilling activities in 2024.
the layaran-1 probe is the first of a four-well exploration campaign targeting the same oligocene play as harbour’s successful timpan-1 well, which was drilled on the andaman ii psc in 2022.
the timpan discovery flowed at 27 mmcfd of gas and 1884 barrels per day of associated condensate during testing.
the drillship capella will now move to spud drill the harbour-operated halwa and ***o wells on the contiguous andaman ii block. harbour holds a 40% operated interest in the andaman ii psc where its partners are mubadala and uk supermajor bp.
the drilling unit will then return to south andaman to drill another well in the latter half of 2024, the location of which will be confirmed in light of layaran’s success.
co-venturers in the south andaman gross split psc are operator mubadala with an 80% interest and premier oil (harbour) on 20%.
https://www.upstreamonline.com/exploration/-huge-milestone-for-regional-energy-security-mubadala-makes-indonesia-ultra-deepwater-discovery/2-1-1573621
Brent now trading circa $80 with UK & European Gas prices also nicely on the up today:
https://tradingeconomics.com/commodities
Harbour Energy : responds to UK Government announcement on CCS emitter sequencing
Harbour Energy today Wednesday 20 December responded to the UK Government announcement providing clarity on the process for emitter sequencing to CCS projects.
Gustavo Baquero, Harbour Energy's Executive Vice President of Strategy, Business Development and Energy Transition said:
"Today's announcement marks another significant step forward for CCS projects like Viking CCS and Acorn and the development of the UK's carbon capture and storage industry, which is critical to delivering the energy transition. It is important that momentum is maintained and the selection of the anchor emitters to individual clusters are assigned as quickly as possible, which will enable businesses like Harbour to make vital investment decisions to help enable the UK to meet its legally binding emissions reduction targets."
Additional information:
Viking CCS is the Humber-based CO2 transportation and storage network led by Harbour Energy together with non-operated partner bp. Harbour also has a 30% non-operated stake in Acorn CCS in northeast Scotland.
The announcement from the UK Government's Department for Energy Security and Net Zero is available here:
New vision to create competitive carbon capture market follows unprecedented £20 billion investment - GOV.UK (www.gov.uk)
https://www.marketscreener.com/quote/stock/HARBOUR-ENERGY-PLC-120993565/news/Harbour-Energy-responds-to-UK-Government-announcement-on-CCS-emitter-sequencing-45606887/
new gas discovery deemed as ‘major development’ for southeast asia
abu dhabi-headquartered energy company mubadala energy has made a significant gas discovery offshore north sumatra, indonesia, using one of seadrill’s drillships.
while announcing a new gas discovery at the layaran-1 exploration well, drilled in south andaman, about 100 kilometers offshore north sumatra with the potential for over 6 tcf of gas-in-place, mubadala energy explains that the discovery marks “a major development” for the southeast asia energy landscape. the well was drilled with seadrill’s west capella drillship, based on the information from mubadala energy.
the layaran-1 well encountered an extensive gas column with a thickness of over 230 meters in an oligocene sandstone reservoir. the abu dhabi-based player is the operator of the south andaman gross split psc with an 80% stake while harbour energy holds the remaining 20%. this is the firm’s first operated deepwater well, which has been drilled to a depth of 4,208 meters in 1,207 meters of water depth.
furthermore, the positive outcome from the layaran-1 discovery will de-risk the multi-tcf of prospective gas resources in the area, providing the foundation for future organic growth and additional exploration drilling activities in 2024. a complete data acquisition including wireline, coring, sampling, and production test (dst) was conducted. the well flowed over 30 mmscf/d of excellent gas quality.
mansoor mohamed al hamed, ceo of mubadala energy, commented: “with our strategy to expand our gas portfolio to support the energy transition, this development offers material commercial opportunities and adds momentum to our strategic growth story. this is not only a significant development for mubadala energy but a huge milestone for indonesia’s and southeast asia’s energy security. we are proud to have achieved this by leveraging our world-class technical and operational capabilities.”
this newly confirmed discovery is the second consecutive successful well for mubadala energy in the andaman area, coming after the success of timpan-1 (harbour operator, 40%) in andaman-ii, which itself came after the success at cengkih-1 in sk320 in malaysia. these discoveries add material contingent volume and provide a platform for continued growth for mubadala energy in the region.
while confirming the discovery at the layaran-1 well, harbour energy highlighted that the well was the first in a four-well exploration campaign targeting the same oligocene play as the timpan-1 well drilled on andaman ii in 2022. the harbour-operated halwa and ***o wells on andaman ii are next on the rig’s drilling agenda.
https://www.offshore-energy.biz/new-gas-discovery-deemed-as-major-development-for-southeast-asia/
proactive investors
harbour energy receives indonesian boost
harbour energy plc (lse:hbr) received a boost after the drilling success of a partner on a gas licence in indonesia in which it has a 20% interest.
operated by mubadala energy, the oil and gas arm of abu dhabi’s mubadala investment company, the layaran-1 well on the south andaman licence produced at a rate of 30 million cubic feet a day. that's the crude oil equivalent of 5,300 barrels.
layaran-1 is the first of a four-well exploration campaign targeting the same oligocene play. the rig will now move to drill the harbour-operated halwa and ***o wells on the andaman ii licence area.
in early trade, the stock was 239.1p, up 5.1p.
https://www.proactiveinvestors.co.uk/companies/news/1036606/harbour-energy-receives-indonesian-boost-1036606.html#0
The 'well encountered an extensive gas column with a thickness of over 230 meters in an Oligocene sandstone reservoir', Mubadala Energy said in a statement. "A complete data acquisition including wireline, coring, sampling and production test (DST) were conducted. The well successfully flowed over 30mmscf/d of excellent gas quality."
Good one, now expecting a few analysts upgrades here in coming days.