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June production was impacted by maintenance of J-Area - others fields might have seen a move into their maintenance period but any impact was minimal. June production at Captain was a same again c.27Kboepd (gross), not as high as I expected from offload timings, but as I said last month I'm still getting to grips with this. There has been a couple of in-out-in again offloads which can confuse my numbers. Also, I assume full 500Kbo offloads which might not always be the case. Captain Q2 production was slightly up on Q1.

The loss of J-Area production knocked c.23Kboepd off June compared to May. As a result, the NSTA numbers for Q2 are 8% down on Q1. Oil & gas prices were also lower in Q2, but I have Q2 EBITDA on c.$510m, which I think will lead to good interim results. The CFFO number will be influenced by changes to inventory.

CFFO/boe is a useful metric for comparing companies, but important to understand the impact of individual company tax reliefs and their durability. I try to assess this metric against a company's dividend yield, and its ability to maintain or grow dividends. That is, we must consider how the CFFO is being spent.

Botham, it doesn't look like your question will be answered here. A question to ask at the AGM. Worded right it would be hard for AH to dodge.

You might remember that since this prospect originated in 2019, I never thought the cheap well re-entry idea was anything other than a hook to land a listing. Now the Westmarket directors have landed their listing, albeit via an expensive RTO, I suspect the re-entry plans will be dropped and something else introduced via a placing. Hence, the idle time since the Spring and the AGM resolution for the removal of exemption rights on shares and warrants ahead of a future placing, which will not favour existing holders.

The directors got their free shares in the RTO and still have their c.£1.2m loan in the business, which has attractive conversion terms.

There is still performance shares tied a Hussar, ‘15,000,000 Performance Shares upon commencement of drilling at the Hussar’ but note this is not tied to a well re-entry, Hussar 1.

Post AGM, I’d expect a placing c.£5m-£10, for a drill on Hussar 2. (H2 will have more favourable seismic support that H1). The board has repeatedly said that Hussar and Mt Winter would be initiated before any JV. But circumstances can change, so who knows.

I continue to watch with interest.

The only query of my summary was on VAT.

These are extracts from the latest accounts:

"The Group has forecasted cash outflow over the assessment period totalling to £4.5m (including repayment of CSS Loan and VAT liability) , of which approx. £1.4m (including VAT liability) is committed at this point in time and undeferrable"

"Included in other payables is a provision for £872,908 for VAT repayable to HMRC (2024: £306,746)."

The 'other payables' are a current item so due to be repaid on some date before 31st Jan 2026.

Westmarket directors acquired their 26m shares at the RTO based on a valuation of a program of well re-entry on Hussar (100% WI) and Mt Winter (JV in progress). These projects were acquired at little cost with minimal licence expenditures over previous years - costs carried by the business. Leaving the 'program' of planned re-entry activities on Hussar and Mt Winter ascribed a value of £3.25m to the directors at the RTO. The c.6m 'performance shares' for the increase in Hussar resource seemed nailed on, so more accurate to say the re-entry program was valued at £4m.

The 5-6 years of GEX expenditures leading up to the RTO, which included Hussar project costs and over £1m in the pursuit of an AIM IPO, were funded by directors loans, private investors in (Convertible Loan Notes) CLNs, and a mix of other creditors.

The directors loans were converted to a continuing loan of c.£1.2m accruing interest at 8% , with a c.£0.5m cash repayment from cash raised at the RTO.

The private investor CLNs were repaid via a mix of shares and warrants. The lock-in period expired last Jan, so these investors have been free to exit.

The other creditors received shares and warrants with a continuing loan (CSS loan) c.£800K. The CSS loan is due next week, 31st July, but I understand will be deferred. However, £872,908 for VAT repayable to HMRC is due within the next 6 months and not deferrable.

The shareholders and creditors of MMM (the shell company) were rewarded with shares to the value of c.£3m at the time of the RTO.

Retail investors put £5m cash into GEX for 40m shares at the RTO. 39% of current shares in issue.

This is my summary of the structure of the business. If anyone sees an error please highlight it

Here's an earlier assessment I didn't post.

"There are many moving parts but essentially HBR has presented a medium term outlook having a slow decline in production volumes alongside a slightly faster decline in capital expenditure. Given growing Opex (inflation driven) and a continuation of current oil and gas prices then it's reasonable to assume close to the 2025 guidance of c.$900m FCF continuing over the medium term.

Maintaining the total dividend payment of $455m p.a. ($380m to voting stock) could release c.$200m-$300m p.a. towards buybacks, which would lead to a 5-8% growth in dividend p.a. With the current dividend yield of 10.5%, that would represent a healthy medium term return. The guidance is also to reduce net debt $0.5-1.0bn in the period 2025-27.

But there are risks to the downside and the upside due to commodity prices, M&A activity and changes in fiscal policies.

Those are the risks I monitor, not on a day to day basis but rather alongside the periodic trading updates (roughly quarterly); while also monitoring the share price for opportunities to top slice when offered. To be clear, given the parameters of the first two paragraphs of this post I would not be invested here at say, a share price of 400p. If that share price was close to be offered, in the absence of positives to the parameters outlined, I'd be out..

That's the basis for my investment in HBR. Yours may differ - we have our own expectations on returns, capital and or dividends.

However, there is also the BASF shareholding in play. BASF want out, and HBR has given itself the ability to buyback 15% of stock (c.$600m at current share price) to help BASF on its way, 'providing' the BOD considers such a transaction in the interests of HBR stakeholders. (I deliberately use the term stakeholders not shareholders).

HBR doesn't have to be involved in BASF's exit but as an observer of stock markets in general I'm interested to see how this plays out."

I received a very prompt reply from Enquest IR (as usual) on my query on their June EPL payment.

Stevo12, as you say, Enquest has a different tax status - in arrears - and there were a number of factors that led them to make the c.$100m June payment, leaving much lower tax payments due through the rest of 2025. You also make an interesting point on Harbour being subject to POA rules. I hadn't considered that their EPL payment schedule would align with the core UK tax payment schedule, but it makes sense that it would. (It makes my comparison of Harbour's H1 net cash flow from operations, due 7th August, more relevant to Aker BP's number.)

On your $2bn reduction in debt - Harbour were very clear in a recent presentation that their target for debt reduction 2025-27 is $0.5bn - $1.0bn. It is that guidance that raises my expectation that, not withstanding the complexity of the BASF situation, buybacks are likely this year leading to a higher dividend yield, given the fixed dividend payments.

Sekforde, thanks for your reply, but you have a frustrating habit of featherbedding some of the metrics. Harbour's guidance for 2025 Opex is $14. If I squint at their separation by country presented in a graph, then I might get to just over $12. You see $11. But I'm trading Harbour's combined business, not their Norwegian business. I've dug into Aker BP's numbers more than I wanted, so not inclined to go back to them. The market has placed a valuation on Harbour and Aker BP. They are both large companies with good trading liquidity, so I've little reason to question the market's assessment.

For 2025 FCF I'm guided by Harbour's $0.9Bn. They gave the associated assumptions. You pointed to current prices above the $65, and imply a $1.bn FCF outturn. Perhaps that will be the result, but current gas prices are more than $1/mscf below assumptions, which cancels the more positive oil price.

My key metric in the oil/gas sector is the dividend yield, it's durability, and expectations on dividend growth. With that in mind, a few weeks back, I assessed Harbour's dividend prospects. I write these assessments in the form of a post - a relic from the style of my field reports as an engineer.

I didn't post it at the time, but I will now to expand on my comments above. Given the 3,000 character limit, I'll post it as a follow up.

Thanks again for your replies.

Hi Stevo12, you say, "Akers FCF in H125 looks great at $3.3b but big tax bills to pay in H225 and full year 2025 will not likely be much higher than the $3.3b for first half."

The $3.3bn Cash Flow from Operations number I quoted is net cash flow after tax paid. Sekforde was accurate in highlighting negligible Free Cash Flow (FCF) given Aker BP's high current Capex on 3 significant projects. However, you also highlighted their high Capex, so perhaps our difference is in interpretation.

But the point I want to pick up on is your comment. "big tax bills to pay in H2 25".

How to you get to this?

In H1 25 Aker BP has paid $2.3 bn in tax. I'd expect a similar amount in H2 25. My understanding is the Norwegian taxes are generally paid with a delay of 6 months, so less lumpy than the EPL Harbour has paid in recent years.

But this leads me to a question on the EPL payments schedule you might be able to answer.

In a recent update, Enquest referred to a $100m EPL payment to be made in June 25, implying higher retained cash flows in H2 compared to H1. Historically, the EPL payment had been due by 1st Oct. Do you know if that has now changed?

In which case I'd guess HBR will also be paying their EPL tax in H1.

Sekforde, I felt the comparison with HBR was flaky, particularly on OpEx which Stevo12 has highlighted, which is why I drew attention to the net cash floe from operations number - arguably a better comparison. Though. my preferred measure is dividends, and I have them both on 10% yield. In terms of growth, HBR was pointed to a medium term level of an average 450Kboepd - Mexico and other development are likely to add further out - but Aker BP already has projects in play and project 600 Kboepd by 2030.

From Google

"Aker BP is not directly part of BP, but rather a separate, independent company. However, BP holds a 30% ownership stake in Aker BP. Aker BP was formed in 2016 through the combination of Det norske oljeselskap and BP's Norwegian exploration and production business."

From Aker BP Q2 numbers

2025 H1 Cash Flow from Operations, $3,349m, equivalent to $42.2/ boe.

Compare with Harbour's cash flow number when it's released 7th Aug.

Hi Tamovv, the June production numbers are released 1st Aug so I don't have a full picture on Q2.

We have entered the summer maintenance window, so some fields may have had shutdowns during June which would impact the Q2 outcome. What I can say is that Captain continued production through June with (I believe) the highest monthly production YTD. Captain is Ithaca's highest net producer and while having substantially higher production in 2025 compared to 2024 - and my expectations - it also has significant volatility month to month. Gross for Jan & April was c.20Kbopd and gross for Feb, March & May was c.27Kbopd (NSTA numbers). As I said, June should beat 27Kbopd.

If the other key fields, J-Area, Cygnus, Elgin/Franklin & Seagull have not entered maintenance or suffered any problems then I'd expect Q2 production to be at or above the Q1 number. I might come back on EBITDAX numbers when the June numbers are released.

I've been following Captain offloads and two metrics have surprised me. 1) a significant step up in average production since the start of 2025 and 2) in spite of this improvement, continued variability in production from one offload period to the next. I've followed Kraken offloads for years so have reasonable confidence in my observations, but it is early days with Captain. Given the level of investment in the Captain infrastructure this year - the Safe Caledonia Flotela hooked up late May - I don't know if outages are planned or incidents. However, there was a 2 week period with production of c.32Kbopd, which shows the production levels achievable once efficiency levels are optimised. Worth noting there are further wells coming online at Captain and the peak of the polymer gains are not expected until 2026.

On the dividend I've high confidence in a $500m payment for this FY, but I don't expect a $250m interim. A couple of years ago Ithaca said they'd move to a 1/3rd interim, 2/3rds final schedule, after the completion of payments outlined in the IPO. My interest is in what dividends might be paid in the 2026 FY. The upcoming interims might provide some insight - how much of the inventory charged in Q1 will flow back to CFFO. Further M&A similar to the two recent acquisitions will also support the CFFO, the key driver of dividend payments.

I don't have much to say on your tax questions. I also noted Stevo12's comments on 5 year delays before reliefs become effective, but I also noted Ithaca gained tax relief from their acquisition after one full tax year following the date of the acquisition, so clearly I'm not on top of the detail.

Hi romaron, I don't have access to the site, so can't speak to the specifics of its content, but I'll react to your other comments.

I've never believed that a link with Serica was AB's 'transformational deal'. Given the time since AB's original comment I suspect prospective deals have come and gone. I think AB still sees a deal in the North Sea to be made - he has specifically said 'North Sea'. But I picked up from recent comment that the deal might not be as transformational as AB initially hoped.

A link with Serica could still happen.

I also see Waldorf assets becoming available, but I'd have thought ENQ would prefer Waldorf's 29.5% holding in Kraken to fall to a company like Ithaca rather than taking on 100%. ENQ is already heavily weighted to just 2 assets - Kraken and Magnus. I think Ithaca/ENI involvement in Kraken and the prospective Bressay gas development would add value to Enquest's 70.5% holding.

Recently you posted an extract from Doomberg, which connected with me, "Prudent execution in playing the pieces as they lie is the preferred path." That is how I manage my investment in the sector. I'll speculate with the everyone else on amendments to the EPL - I see an adjustment to the allowance, ahead of next May's Hoolyrood's elections as a good possibility - but I'll only act on confirmation of a change.

Which takes me to Enquest's 2C resource, which is largely in Bressay and Bentley. Beyond the Bressay gas development I see little additional value from these 2C assets, similarly with Ithaca's 2C asset in Cambo. I've recently posted on the Ithaca board that I prefer their recent incremental acquisitions in the North Sea to the higher risk development of Cambo. But within the merger with ENI a value of c.$300m was ascribed to Cambo, so I'm wary that ENI might push through with a marginal development of Cambo under current EPL rules..

I'm intrigued to see how the Bressay gas project develops, though confused by the 3rd party involvement, beyond the tax wheeze Stevo12 described at the time. I wonder if there's an environmental factor driving the project, perhaps a statutory reduction in flaring on the FPSO. At the next update I'd expect some guidance on the gas project timelines and Kraken drills.

Https://resolutioncopper.com/

This should answer your questions.

"The Mt Winter EP155 ownership, originally at a projected 75%, was the subject of an RNS dated 22nd January 2025 which referred to an increase of Company ownership to 100% on settlement of a Share Purchase Agreement. In addition to the planned re-entry of Mt Winter 1 two further wells were drilled at EPA155 which are currently being reviewed for their respective sequential re-entry potential. The Company continues to advance the re-entry program timeline following the execution of a previously announced agreement for acquisition of 100% of the Mt Winter tenement from Mosman Oil & Gas, which remains on track for completion."

Gobbledygook!

The current holders of this licence, Mosman, will be looking at this and wondering, when are GEX going to complete the transaction and pay them the AU$300K cash balance for the EPA155 licence.

Does this resource upgrade qualify the directors for another 'performance bonus'?

"Sagebrush valution is well over $100million".

That's a big change. 6 months ago Mosman's share in Sagebrush was valued at $630K. Since then Mosman has released a report from 30 years ago showing a show of Helium in a gas sample from the Leadville formation. That gets you to $200m? Don't underestimate the knowledge the Seller has about the asset. They're not giving away $199m and change.

"Their current focus is now on Sagebrush, which has already had positive high helium flow rates, and plenty of oil also expected to be in the area."

The gas flow rate was c. 150mscfd, which is not particularly high. That's why the next step is for Mosman to conduct an extended well test (EWT) on the asset, before doing anything else. IMO if the helium disappoints the asset is still an oil play. But that needs capex on a drill - again the seller will have done their own numbers. The oil may be lucrative, but not likely a game changer.

I agree with your closing point on doing your own research.

Romaron, you raise an interesting prospect, "Shell/Equinor or Ithaca/ENI making it a threesome."

I don't think Shell/Equinor will be putting their keys on the table. The new company 'Adura' is described as, "This 50-50 joint venture will combine their offshore assets and expertise, with the aim of maximizing value and extending the life of the North Sea's oil and gas resources." They wouldn't be interested in Enquest's Malaysian and Vietnam assets, and I don't see AB splitting out the assets.

As an investor in Ithaca I can see some attractions; in the UK Kraken/Magnus, and Malaysia/Vietnam if the numbers are attractive (I don't have a measure on the new prospects AB sees in S.E Asia.)

But my sense is that Enquest's other North Sea assets, are much less attractive. I'd guess the GKA hub is only a year or two from decom, and Golden Eagle is now down to c. 3,000 boepd. Any 'premiums' AB believes these hold can be costed out.

Currently, Ithaca is solely focused on the North Sea, but they do talk of looking elsewhere. I'm sure Ithaca will have looked over Enquest, and if AB has put together an attractive set of Malaysian development opportunities then perhaps Ithaca will bite.

Enquest frequently highlight their strengths in decom. - though I don't have a financial measure on this - and their high level of production efficiencies (P.E.) on Kraken and Magnus. P.E is certainly an area where Ithaca has been deficient but their new operations director seems to be getting on top of P.E issues, particularly at Captain.

I hope Ithaca has no interest in Veri Energy, but this shouldn't be an issue as I'd guess these activities are ring-fenced and Magnus production through SVT can also be ringfenced, much like BP's activities from their WOS fields. I believe gas from Rosebank will be going through SVT.

Bottom line: I think Ithaca can replicate the equivalence of the KrakenMagnus assets elsewhere in the North Sea, as they've demonstrated with two N.S. acquisitions this year, but AB's package of Malaysian assets might be the deciding factor.

I'd missed this RNS from last month. I don't know if there's been any comment posted but I thought it added some perspective to tax payments to the UK government.

Please correct me if I have my sums wrong. This is my assessment:

2024 production 40,736 boepd

Malaysian prod. 8,149 boepd. Tax payments $81m. Equivalent to $27/boe.

UK production 32,587 boepd. Tax payments $82m. Equivalent to $7/boe.

There will be some impact in a delay on full year production numbers, as ENQ count Vietnam production in their guidance , but with an effective date of Jan 2024 there's little impact on the financials. In fact a delay could be seen as beneficial as the payment of the closing cash balance is delayed, while the asset continues to accrue free cash flow which is credited to ENQ. That is, no interest cost on addition debt; though the cash balance is a modest tens of millions $.

AA123, you ask, "Would anyone be that stupid to risk everything and clearly state untruths that could be clearly seen?"

In May 2020, Georgina Energy took on responsibility for Native Title negotiations required for the permit (EPS155 - Mount Winter) to be granted. (Extracts from the RNS copied below)

October 2024, AH was interviewed on progress and prospects at Georgina. Early in the interview the interviewer focused on a comment AH made about EPA155 being under permit for 16 years.

Listen to the 'company paid for presentation' (link below) from one minute in:

AH on EPL155, "It's been under application for 16 years."

Interviewer, "why hasn't it been approved?" ... (AH mumbles) ... "not on your tenure though?"

AH, "Nothing to do with us!"

EPA155 was on Georgina's watch for the last 4 years.

AA123, consider your question again.

https://www.cruxinvestor.com/posts/georgina-energy-nears-critical-drilling-at-hussar-project-pursuing-helium-hydrogen-resources-in-australia#:

Mosman RNS 11/5/2020, - Farmout of Amadeus permit EPA 155

Mosman has entered in to a Farmout Agreement with an Australian company (the "Farminee") Westmarket Oil & Gas Pty Ltd a wholly owned subsidiary of unlisted public company Georgina Energy Plc, a helium focused business with various assets in Australia. The Farminee will be responsible for Native Title negotiations required for the permit to be granted.

The Farminee will also undertake technical work in accordance with the permit work programme, and thereby earn a 70% working interest and become operator of the permit. Mosman will retain a 30% working interest in the permit. At the time of drilling of a well, the Farminee may elect to carry Mosman through the cost of the well and in that case would earn a further 15% working interest, in this scenario Mosman would retain a 15% working interest in the permit.

In addition to the forward work programme obligations set out above, Mosman will receive an immediate contribution of A$15,000 from the Farminee in consideration for past costs and a further A$15,000 following completion of the required seismic re-processing work.

From page 10 of final accounts

Re-entry

"The Hussar well will be re-entered by drilling out the existing cement plugs and subject to an independent engineering inspection of casing integrity will be deepened to test the main target zone(s) by running additional casing strings. Should the independent engineering inspection deem the existing casing to not be competent, the Company already has several backup sites identified to drill a new test well or wells."

Well testing

"Finally, after drilling has been completed, potentially commercial zones may be flow tested to the surface for extended periods of days, weeks and in some cases, months."

At the RTO last summer the Hussar project was summarised as a straightforward exercise, which would be entirely funded by the £5m placing. Unfortunately, the RTO required a detailed prospectus and a cursory read would reveal a low prospect of success - but who reads the prospectus?

12 months on with 90%* of the cash spent and questionable on the ground progress, they are having to come clean on what a re-entry on Hussar entails, and potential costs beyond the earlier estimate.

* From note2. "31 May 2025, at which point the Group held approx. £0.43m in cash reserves,"

From page 11 of accounts:

"These financial statements are prepared on the going concern basis. The going concern basis assumes that the Company will continue in operation for the foreseeable future and will be able to realise its assets and discharge its liabilities, loans and commitments in the normal course of business.

The Directors have undertaken cashflow forecasting to determine the funding needs of the Group for a period from 31 May 2025, at which point the Group held approx. £0.43m in cash reserves, to 31 October 2026. The Group has forecasted cash outflow over the assessment period totalling to £4.5m (including repayment of CSS Loan and VAT liability) , of which approx. £1.4m (including VAT liability) is committed at this point in time and undeferrable and £3.1m (including repayment of CSS Loan) is deferable due to support letter from the lender for extension of tenure and the potential for contract cancellation or fee waiver should the Group be unable to secure the additional financing required to meet all of its planned corporate and exploration activity expenditure. The Group has

Consequently, the Directors have determined that the Group and Company remains a going concern over the period of assessment. However in order to meet its planned corporate and exploration activity expenditure, additional funding will be required over the period of assessment.

As a result, there exists a material uncertainty which may cast significant doubt on the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern. "

I think the rush, by posters here, to abandon the Vecta drills ignores the US$1m of assets sitting on the balance sheet (31/12/24), which Mosman would be giving up. This is before the drill costs to-date and any cancellation fees. I've no idea if curtailing the drill activity is best or not, but once done the die is cast. No doubt the Vecta 'experts' will make their case, but it would help if they put their money where there mouth is - still unclear to me who is paying for the recent drill.

I said in a recent post that Mosman are very good at raising funds but not so effective at spending the money - that's after watching their activities since Feb 2016. I've seen many hopeful projects come and go - Arkoma, Welch, Stanley, Falcon, Winters, Cinnabar, now Vecta (?). Why should Sagebrush be any different? Of course the 'prospect' is what keeps the speculative interest here intact - but not for me. I prefer to read the book.

The current market cap is £5.5m, some way over the 31/12/24 net asset value of £4.4m (A$9,075K). Still speculation in the price.

But tomorrow marks the last day of Mosman's financial year, and we've had sufficient detail to estimate the closing net asset value - I make it c.£3.3m, assuming no impairments - I'll spare you the detail here.

The new CEO will look closely at assets and their value. He/she will want to clean up the balance sheet ahead of their watch, so impairments are a consideration.

Take the US oil and gas assets at A$4,616. I believe Sagebrush and Coyote were acquired (paid for) post the interim numbers, so those assets relate to Arkoma and Cinnabar - perhaps I've missed something - but the gross profit from US assets was US$83K (A$127K). A return of 3%.

Arkoma has been for sale for several years, but a sale would reveal it's true value, likely to be well below its value on the balance sheet. Similar for Cinnabar - not for sale (I believe) but needing significant investment to realise its value. Also, the A$1,206K of contingencies on last year's Nadsoilco sale look a distant prospect. There's lot's of fat a new CEO can cut from the balance sheet, and that will be reflected in the Market Cap, albeit weighed against any speculative interest that might be added by the CEO's plans.

It could be an interesting few weeks of news, but the numbers might not be revealed until the full year accounts are published in Nov.

All good speculative fun for those that like to play slots. Remember the house always wins.