Member Info for Megla

Back in the PMO days, the company was run mainly for the benefit of creditors. Now the company’s main benefactor is HMRC.

The real problem is energy prices reverting towards more normal levels (oil already have when adjusted for inflation). If oil prices continue to stick around these levels but gas prices drop to say £1 per therm, then FCF drops dramatically in 2024 as the tax losses are utilised.

By my calcs, from 2024, FCF would have been better at 60p a therm (without EPL) than 150p a therm with it (assuming a stable oil price).

Harbour need a major international acquisition to diversify away from this disastrous Conservative policy.

Stevo,

I think the question mark about whether the UK government would rescind the tax should gas prices fall is the big one.

Taking into account inflation over the last two years, Oil is definitely not in Windfall territory. Gas prices most definitely still are, but taking into account Harbours hedging, we only have around 16% of our total production for 2023 that is (currently) receiving significantly inflated commodity prices. That does improve next year as the hedges drop off, but if Gas prices do fall to 100p a therm or less, then they'll be a huge amount of pressure from the industry for the tax to be repealed.

It really is disappointing that this poorly designed tax has been implemented by a Conservative government, the original 25% with the attractive investment allowance was difficult to argue against given the pressure on household bills, but at 35% with the investment allowance significantly reduced and no plans to repeal if commodity prices fall is very poor.

We may get some form of guidance from the board come the January update so will reframe from discussing FCF for 2023 given how close it is. I'd also like to see a suspension of the buybacks, implementation of a $75m quarterly dividend (10% yearly yield) and noises about a major international acquisition, although I'm sure others will have differing views.

The EPL is an absolute disaster but the share price is now discounting a heck of a lot.

Bought in today for a medium term hold.

No idea who it is, but they’re offloading pretty quickly. Some chunky late reported sells have appeared both today and Friday. Holdings RNS must be imminent.

Once cleared the stock should do well.

A company that produces mostly fixed priced gas, does have limited exposure to OIL prices numbnuts.

You really are the most ridiculously stupid person I’ve ever encountered on these forums. The fact you’re investing money when you don’t know the difference between CFFO and FCF is astounding.

I’ve stated the impact of the oil price, again people can see that in the thread numbnuts.

You just write fking nonsense.

Financial professional that doesn’t know the difference between CFFO and FCF lol.

No Luckcounts, it’s oil and condensate, but then you’re an idiot so you wouldn’t know the difference.

The oil price is a factor in the North Sea and Senegal, I never said it wasn’t, so maybe pipe down or you’ll just continue to make yourself look stupid.

*interest

This is utterly hopeless.

Read up on the difference between working interstate and entitlement production.

Also, speak to IR about condensate pricing in Egypt.

Entitlement production is roughly 50% of the working interest.

If oil is 20% of the mix, that's 4kbpd - I don't know the mix between oil and condensate.

If oil prices rise $50pb, that's a $70m uplift in revenue, post tax probably about $50m boost to CFFO. Hence just yesterday, I said CFFO would probably come in around $200m.

So not sure what you point is Madpunter?

No LuckCounts, you said Egypt free cash flow is $150m, everyone can read it a couple of posts down. You’re just embarrassing yourself further.

The company has little exposure to oil prices, it doesn’t surprise me that you don’t know that.

Yes the share price is a joke and games are being played, but that still doesn’t excuse poor fundamental analysis.

Maybe read a few books.

Lol, you really are an idiot that has no clue what you’re invested in.

It really is embarrassing that you don’t know the difference between CFFO and FCF.

Or even page 9 where they spell it out….

“The average Cashflow from Operations for previous three reported years (2018 – 2020) was approximately US$124 million net to Cairn (if Cairn had owned the assets over the period).”

You’re an absolute embarrassment.

My god LuckCounts, read the circular (pg 33) and get back to me with an apology.

Given they sold tax free producing barrels in the North Sea, that would have produced $400m+ of FCF this year at the current curve, it’s pretty obvious they had no clue where oil prices would go (much like the rest of us).

Fingers crossed. Very odd price action over the last couple of days.

I don’t think that’s going to tell us why the market decided to slam the share price over the last couple of days FWIW.

The $150m is CFFO, so pre Capex, G&A etc.

We only produce about 4Kbopd of oil (entitlement), so CFFO won’t double just because the oil price has. Would assume somewhere near $200m CFFO at current oil prices, so FCF neutral for the year when taking into account the $200m CAPEX.

Very true, it’s far too close to net cash for it to make sense, regardless of peoples thoughts on Egypt.