Member Info for LuckyLuciano

I was a bit disappointed to see that edging on gas is planned at same quantity levels for 2023..
Hedge position 2022 2023 2024 2025
Oil
Volume hedged (mmboe) 18.80 7.30 - -
Average price hedged ($/bbl) 61.15 61.05 - -
Gas
Volume hedged (mmboe) 25.37 23.00 8.33 1.55
Average priced hedged (p/therm) 50.75 40.86 43.05 44.55
Practically a quick sum shows that from 60% of production been edged in 2022 will reduce to 40% in 2023.
Am i correct or missing something..

https://www.gov.uk/government/publications/cost-of-living-support/energy-profits-levy-factsheet-26-may-2022
I like this bit:
The current 10% Supplementary Charge provides companies with an investment allowance that can only be claimed once income is received from the field subject to the investment (which can take several years).
In contrast, the new 80% Investment Allowance for the Energy Profits Levy will be available to companies at the point of investment, making it both more immediate and more generous.
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Does it means that potentially we could be paying lass tax then before?

Well according to recent company forecast, net profit will come at $1.5/1.7 billions for 2022, with oil at $100 average. Considering that in the first 6 months POO has average above $100 and also that $ has strengthen, results should be above forecast.
Maybe £800mil profit and debit below $1billion??
But also what will support HBR sp will be, if the BoD will take this occasion to confirm that WT will have minimal impact on the bottom end profit number for this year, and that after having time to work out how to use the capex rebate, the same will happen going forward, with the help of increasing production.
In the end though is all to do with POO, on this I am looking at the graph for this year, and can see clear support level been hit 3 times at around $95ish.
This is a strong support level forming and could be an indication of where the market is thinking POO will remain for the medium terms.
POO is so difficult to predict, so many factors that are beyond fundamentals is almost everyone guess, but if I have to guess POO for the next 2 years, I can't see it coming down below 90's
In US after almost trebling from pandemic prices, they still pay almost half of the price or gasoline we pay in Europe.
Oil price at this level won't cause demand destruction...not with unemployment so low and wage rising.
The only biggest danger (and I am sorry to say this, for obvious reasons) is if Putin and Zaleski sit down for pace talks and the west lift sanction...
This will affect sentiment on oil not the fundamentals, but could be enough for POO to come down below support.
All IMO...dyor.

My world Jeff more you post and more I understand how you are and where you come from.
Say again mate? Did you say that there never was a deadly virus..??????
If that is the case, again I am not sure, because is difficult to read what you write and understand it, can I say you are completely fuk@Et up.
Your statements confirm how much you are an ignorant, to the point that you can not even write. And yet you pretend to know more than anybody else...Ask yourself mate how comes that you seem to know everything about world finance and macro economies and yet you can't write? Is in not a bit odd?
The conspiracy theory on Covid 19 is classic, is the ultimate proof that you are totally mad.
I should have understand that from the start, in stead of giving you so much of my time by answering to your stupid posts. I feel a bit embarrassed now but hey ......better later than never.
No more reply from me nutter..

Rookie1
The government are not stupid, they know a worldwide recession is imminent..
This is not 100% for sure. Consumer confidence and spending is still high and unemployment is at historic lows...The only/main thing to worry is inflation, but there are many mitigating factor to take in to account. For example since post pandemic because of lack of personnel, I have raised my rate buy 25% and my client (wealthy people I admit) are happy to pay it.
People are convinced that QE through the years has caused inflation, but in reality all this flow of money have gone in the stock market not rally in people pockets, not directly and not with the same proportion of the inflated sp of some tech companies commanding PE of 100 even 200 a sp still rising.
The current problem is not really inflation because it is not going to happen to the point of causing a recession. The problems are supply disruption, war, pandemic and to some extent the stupidity of some leaders or the lack of will to tackle these problems...
On the WT that will decimate investment which sends the price higher not lower. WT is a localised even of the NS, where POO is a global price governed by not just UK wt....but more importantly , it still has to be see if WT will drive investment away from the NS. I suppose in long time lead project that can be true but in work over capex, where you get increased oil flow immediately it can WT can be a positive...Not expert on oil though...
As I said imv the WT was a political move of a new populist Conservative party, been a conservative party though the introduction of a generous capex rebate, was the compromise which in the end could still work....Moreover supposing that POO will drop to 50$ by end of 2022 for example, I am not so sure if wt will still be in place.

Jefff just to close the conversation on this.
Beside you previous post statement that the market will go lower, I genuinely can't understand what other point you are making after endless posts....I am reading a lot of conspiracy theories in your writing, when in my eyes is just people, financial institutions an Governments reacting the best they can and some time in differed ways, to geopolitics, and economic macro event.
If anything the only true fact in your statement is that Western governments are in debit to the neck and to raise rates will also hurt their huge debit repayment. In this knowledge the Fed has delayed rising rates in 2021 to create a bigger problem now. And now in panic they will rise rates faster to get back the time lost, expect a 1% rate rise comes next Wednesday, which will find new lows for the main indexes...imo
But now that I start to decipher your posts you say that banks and financial are making making ever and ever bigger profit because of this conspiracy theory of your. There are many other sectors and companies making huge profit out there, not just bank. Like it or not you got to ask yourself in a capitalistic society structured the way it is, if banks were not to make profit, how the system is going to function, would you like for banks to be nationalised?
Because I would but I don't think this was your point, inni't.
As I mention before if you are posting on HBR board, a good conversation would be on where the POO is going from here, given the many current fundamental and geopolitical variable...
Big theories on governments debits or trying to figure out if edge funds were overleveraged on oil at any given time is imv a futile exercise, and me I say if you are so sure you should short oil right now, are you?

For start Jefff
I find it difficult to make any sense out of the below statement, either because of your writing but also because knowing my patient, I know that from a paranoid mind, anything make sense even madness.
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12months ago I said the mrkts were being traded oil was in the 60s and said they would drive the price up to hide inflation.
Plus all the banks and hedgefunds are leverage up to there eyeballs in it.Its at 120 now and sps across the board are back close to where it was in the 60s still being traded.
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What you mean maaaan.
Most of your writing is undecipherable and this comes from a foreigner that surely sometime write grammatically stupid things, but it seems that you don't even make the effort my friend.
Secondly Jefff I very much doubt you can back up anything you write. As I said when you use the word "They" you are implying hat you know exactly what every government, every financial and investment fund is doing and why, wow, but not just that, you are saying that you are also able to back it up with data..
I know where you come from with your conspiracy theories, is just that imo your thinking got a bit lost in translation sort of speak, maybe looking at too many Youtube conspiracy theorise and then having to traduce them in writing...?!
Anyhow if in the end your point is, that markets will test lower lows, thank you for sharing mate, I think many here will agree with you.
But please leave out the reasons why.

Talking about conspiracy theorist.......here it comes Jefff...lol
JEFFF be careful, when is sunny, there is a shadow following you. lol
If I was a psychiatrist I would classify the degree of paranoias, when a client in stead of been specific on the subject of his nightmares, start to use the word "They"

HBR is catastrophically undervalued and funds are selling, why?
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I am too invested in HBR and like to give 2 different views to the above very legitimate and pertinent question.
For start the question above is a good question based on a fact, not personal assumptions or even worst, a conspiracy theories.
On conspiracy theories though some time I suppose they can be used as an answer, in absence of proves or certainties...is for anyone choice then to believe them or not.
So some fund are selling.
First view is accepting that HBR is catastrophically undervalued, so why fund sells...
Only logical assumption is that POO will come down badly by end of the year due to recession, (mind you has to be a world recession) and therefore HBR shares are not worth holding, not even if by end 2022, the HBR would have repaid all its debit.
Then there is the question of how much will POO go down, because if it will nevertheless stay above current edging levels, same for gas, with edging disappearing next year, HBR will still make more profits even at lower oil price.
Many factors involved and not easy to predict, possibly not even for a fund management.
Current market correction is creating many good entry opportunities out there, could it be that some funds need to release capital to reinvest in what seen for them a better return.
This doesn't means that HBR is a bad investment.
My second view is that HBR is NOT catastrophically undervalued.
And possibly this is the more close to the truth explanation and would also explain why SOME funds not everyone, is changing investment strategies (good luck to them).
Share price move also if not more on sentiments than fundamentals, if sentiments turn there can be opportunities to invest for the mid/long time frame, but because this kind of investment is based on fundamentals, often is needed for these fundamentals to be realised and materialised, otherwise it would be another short term investment on sentiments.
Sorry the repetitions and possibly simplicity of concept, but often when we are taken by strong convictions and emotions we tend to lose track on the simple facts...(please don't ask why do I know this)
...and so (I think there was a recent post on this board titled HBR v Serica, on valuation)
Sekforde rightly pointed out that due to its current debit still to be repaid (and I would add the stupid edging), HBR valuation by the market is not immediately perceived as very good value, compared to some other peers or other investments .
Indeed I see HBR as fair valued with great potentials if POO stays high and possibly my investment decision is more based on the POO than on HBR, although if POO will stay high in to 2023, I think HBR will bring much higher returns that Serica for example.
Often the truth lays in the middle, but possibly in stead of focusing on why some funds are selling, we should focus on if will POO remain high for 2/3 yer

Given the fact that USA has been a net exporter of oil for a while now, that Putin even before Ukrainian war, was starting to close the gas tap to Europe in order to rise prices, for not mentioning the interest of South Arabia......do we really think that POO will go back down to ridiculous levels?
Consumer spending is still strong, unemployment is at historical lows, the Governments around the world will stop quantitative easing and start give money directly to consumer if needed, but demand and consumption has to keep going , otherwise it will all collapse, especially at higher debit service rates.

Nice post Sekforde
and happy Birthday to your Grandmother pl.
On the WT, IMV the Gov. had to do something given the current inflationary pressure on people pockets/bills, and energy price rise.
It was a political move with minimal intention to hurt the UK Oil and Gas companies.
Indeed plenty of time for Hbr to plan using the generous allowance on capex, to increase production and offset it against the whatever tax rise will be...
Conservative Party after Brexit has been seen as a Populist party and indeed the WT was a populist move, I don't believe for a minute that the Gov. is trying to get some tax revenue out from the North Sea, and given recent events with mad Putin about and Europe dependency from Russian oil/gas, indeed WT is a viable and welcomed way to increase capex and investments in the NS.
Of course it all goes out of the window if POO start to come down...on this my only criticism on WT is the failure from the Gov. to set a oil price level below which the Wt is not applicable. Also the WT could have been set in stages/rates applicable to different oil price scenarios.
But hey I suppose one can't have it all from life...

Just looking at sentiments on POO
US Core CPI out at 0.6%, dollar index up on expectation of 0.5% Fed rate rise
POO has come down a little on the news, would be nice if it hold above $120...given the circumstances.

Have the feeling POO is becoming disconnected with fundamentals though....
We have witnessed similar circumstance with other commodities, recently Nickel price run on LME forcing the exchange to close, losing credibility (imo) and having to wind down some short position by cancelling some long contracts.
Perversely it was thanks to some open short calls becoming unsustainable that stopped nickel price to become even more disconnected with fundamentals.
Is is possible that the same would happen with Oil?!

Its global events that shape the mkts at the end of the day it dosent matter how great a company is and if the last.2 yrs havnt shown you that then maybe your playing at the wrong table
This isnt about profits or losses this is about your /our children's future being shaped by lunatics.The mkrts are on borrowed time a bit like life as we knew it.There is no going back to the way it was.But until the masses wake up it's going to be the future of the lunatics all by there design.==============
Wow Jefff big statements there, lots of conspiracy theories and yet it seems you have all figured out out....
Its global events that shape the mkts at the end of the day.....I am happy with that though.
Oil price due to many global events now to remain above $100, Hbr to repay debits this year and its sp still at 2020 pandemic levels..

Also I am sure Hbr has some cash at bank as well latest was available liquidity (cash and undrawn facilities) in excess of $2 billion. Not sure how much is just cash...
Ans £200mil distributed as divi.
As I said for the same token that a sp of a debit loaded company get shorted, or sold out exponentially, the reverse is valid when the price of commodities is higher and debit get payed quickly.
Moreover and this may be a bit grey area, it seems that BoD of Hbr have made clear their intention of mostly exit edging. This is very positive for sp, not because it will automatically generate more profit, after all we don't know for sure where the POO will go in 1-2 years times, but because potentially it makes clear that if oil stay at this levels the BoD have every intention to generate shareholders returns.

Sekforde
you are right in stead of 3 times it is valued at 5 times more. My point is that with 8 times Serica production, once debit is payed or even before, the sp will have to catch up faster than Serica.
Hbr sp is in consolidation and WT seem to be priced in, good time to invest.

Hi
these are very much unorthodox valuation and comparison, but my point is very simple.
If we strip Hbr Market Cap of say $1.5Bil debit we end up with Hbr been worth 3 time Serica for 8 time its production.
This has to be a compelling investment case....
More we are paying down debit and more we are getting out of oil price edges...
Most investment time horizons can be 2/3 years but with Hbr in less than 1 year we have a debit free cash machine.
With POO averaging above $100 we have to see £10

So the story goes that Uk is independent from Russian gas and oil....
So the story goes that renewable energy solar and wind is now much cheaper than fossil fuel...
And yet, one of the nation with most of the energy coming from renewable and autonomous resources, is prisoner of few market player and traders in the geopolitical space.
The British Gov. is no stupid trust me....They have figured out and counted how much money you and I have in the pocket at the end of the month....They are taxing the north sea and giving some cash for free to the unemployed and rough trouble makers, to keep then at bay. For anybody else if you can't pay the bill the Gov. will lend you money, debit is another form of controlling the masses....
North sea oilers.....who cares, they can always borrow more....
This is the end product of so called Democracy Capitalistic style.....
Hey folks the injustice out there is overwhelming...admit it..
Why if I chose a 100% renewable sourced energy plan, have to pay the same of fossil fuel energy, if renewable is cheaper?
Everybody is out there to look after its own interest and with so many players, it is become a jungle...
One more reason to look long terms to predict any outcome....but what about the incompetence of Rishi Sunak, in not defining a $ price per barrel top, when latest tax rise will expire...

One thing if sure sure though, noting is free these days.

Lets change the way the cyclical concept in economy can be interpreted.
Looking at banks and rates from another angle.
Economic activities heats up, inflation rises and bang! Rate rises too. This would work if debit would be a constant, yes it would make sense. This way any butterfly effect can be priced in.
But is not like this because higher interest increases debt too. Credit crunch didn't came about for no reason.
We can compare the concept of interest rate to butterfly effect and yes because of that, assets were transferred not destroyed.
But what is lost in translation in the Western economies, is that decision making on rates comes from governments, to the benefit of fewer private individuals.
Therefore the concept of cyclical in a economy is false, because is related to a misconceived economic dynamic.
Cyclical refers to recurrent, constant, but there is nothing recurrent in destruction of value if its value is based on increasing debit, or if fewer people become even richer, but are not able to spend their wealth, at the same rate they accumulate it.