Member Info for miles44

Phil gave the answer today: it is down because from formerly 18% of creditors/banks "over half of these shares have been sold". Means that around 8% of shares are still owned by banks who dont want to be shareholders, but wait for the right time to sell. They and we all know that around 45% of shares currently blocked will be free for trading starting 1st of October = Friday next week. Plus everyone can see that once the share price goes up, it always gets sold the next day(s). With HBR right now fundamentals are one thing ... they are good and getting even better. But the structure of shareholders first has to change from "forced" or better said "unmotivated" shareholders and low free float to long-term investors. Banks/creditors still have until next week to sell their shares without facing former Chrysaor investors being able to sell as well. And even though I dont think many former Chrysaor investors will sell their shares once they are allowed to ... even only 10% of them selling their shares will create more selling pressure in October. Once the structure of shareholders is "normal" with some of them trading or shorting, but most of them holding for investment/fundamental reasons, the share price will adapt to the upside. But this might take some more weeks, maybe even 2-3 months. Nothing against it as it was clear from the beginning that the share will stay down for a while. As I leveraged down, I m at break even and if ever the share price stays down, I might buy some more before investors day in December.

The answer for some or you wondering therefore is: its the banks still selling. And it might be former investors AND banks selling in October.

Happy if it goes up of course ... but dont be surprised if you ll see the stock go or stay down for a while.

thanks for clarifying @Soder

and as I mentioned: nice to see that your other calculations do not have to be divided by 2 ;)

guys, thanks for clarifying. If its 20-25 for HBR, that d be a nice suprise for me and I mean it like this (no irony). Until now I was calculating with 10-12, so: all cool if you re right.

as for the hedges true that with options it d be the best thing, but I doubt they bought puts. 2 way collars could be possible of course

what I d like to add is that HBR is probably currently hedging winter 2024 revenues and here gas prices have gone up substantially as well. Not to the extent of current spot or coming winter, but still more around 30% more than half a year ago.

Excluding Tolmount HBR should be around 80-82% hedged in gas btw. And around 50% in oil. Still, selling 20% of your production in gas at spot prices... lifts average prices quite substantially at current levels.

So I m of course positive as well on HBR - just repeating that short term (till end of October) brace for impact - and dont sell.

I m afraid you should be wrong with this @Soder:

"Tolmount final commissioning underway with production start-up expected around the end of July, adding 20-25 kboepd (net, Harbour 50 per cent)"

quote from
https://www.harbourenergy.com/news-and-media/latest-news/2021/trading-operations-update-to-31-may-2021/

divide that by 2 as HBR holds 50%

"With expected plateau rates of 20-25 kboepd net to Harbour, Tolmount was expected to contribute just over 10 kboepd to Harbour’s 2021 production"

@NoFear thanks for your nice words as well. I am not that optimistic in the short term: Friday was one of the creditors dumping shares into the market. With the huge volume we should now be at around 6% of shares still owned by banks not wanting them, so maybe we ll see some catch up tomorrow, but I expect more selling pressure until September ends and the 64% of free float comes "online". And what happends then with these many shares being free for selling... is a good guess....
As for H1 numbers I warn everyone to not expect too much from the last 6 months. Outlook for 2022 should be very positive though and its a good guess if the share price will go down due to disappointing numbers of the last 6 months or go up because of a great outlook for 2022.
One thing though I d like to tell some of you: its a waiting game here and the tree might get shaken another 2 or 3 times until maybe end of October. Maybe too pessimistic... but I saw some of you on reddit being frustrated by the share price... dont be! Expect the worst in the short term, dont sell, maybe even average down one more time if it should go down ... and in case I m wrong ... good for all of us. This stock is NOT GOOD for immediate gratification. Thats why I posted my Sibanye chart on reddit... we might have to wait 2 or 3 years here, but the company will create great returns... waiting for only a month or week and overinterpreting these daily movements... will make you sell the stock before it even starts rising.

To quote famous Rick Rule: "some investors believe in a company and even get it right - and then sell because of a 5% daily loss"

@Pearls as for Neptune no news or further article at all for about 8 days now... Neptune apparently got it that paying journalists and others to tell everyone how great they are is kind of embarrassing for Neptune. Its so very obvious that Neptune owners just want to get rid of their investment on the stock market, but know that with current investment climate being hostile against oil & gas they will get a very very meager return on their ownership with an IPO. Unfortunately with this and other boards being quite vigilant everyone now knows that HBR is really the only possible buyer for their assets. The only one! BP, Shell, Engie, Exxon, Equinor and all other relevant oil companies invested in North Sea oil at least for now do not want to buy oil & gas assets, but sell them. Thats why Neptune made such a fashion show telling everyone how attractive they. And since Neptune´s "initiative" got exposed you dont read anything about this anymore. Check the internet and there is not a single word written about all this for the last 7 days... except in this forum and on reddit of course. Means what? Well: the potential groom (Harbour) doesnt seem to be very excited about the idea and has all the time in the world plus is busy getting its first H1 numbers out plus ending the lockup for 64% of its own shares and we´ll have to see what that new free float will bring tbh.. So my best guess is: the potential bride wanting to get married (Neptune) either has to wait or offer a "bride price" low enough to get an unmotivated groom think that he ll make a huge bargain. If Neptune sells their ownership for 50% of book price - lets buy them. If not ... let them continue their business or organize the first huge oil & gas IPO on the LSE for a long time ... I can already imagine the press campaign and protests against it by climate activists... - so all in all, HBR is in a nice situation here.

Thanks for posting it @NoFear - valuable info !

@Pearls
No share buy back :) its a controlled disposal of a LOT of shares since April, at the moment and for some time to come. But of course there are also buyers. UBS Asset Management e. b. bought 37 M shares and held around 4% of HBR shares as of 1st of July ... other big funds are waiting for more free float coming in October

End of August 9 of the 18% of shares from former lenders/banks had been sold by them and they were still holding the other 9%. So I guess now, we might have seen another 1-2% of HBR shares sold in the market and this will continue all September. I especially look for a huge number of shares sold between 23rd and 30th of September, as 1st of October 64% of shares get out of their lockup and creditors will try to sell a big chunk after numbers are out. So dont be surprised when the share price doesnt go up immediately even with numbers out. SP might even go down despite more or less normal numbers for Q1/21 and a very good outlook

yes - Tolmount is not to be underestimated... production is not hedged and does not need to be hedged. Lets see if management will hedge it or leave it as a "speculative free flow". Could be a good question to ask in a Q&A next week

funny that Neptune - counseled by Goldman, Rotschild etc. - doesnt want to buy HBR, but be bought by HBR or merge. And very apparently does not want to IPO. Therefore the current PR-initiative with analysts being so "positive" about Neptune as a possible buy for HBR reminds me a little of girls photoshopping themselves for their tinder profile.
My opinion: if ever HBR merges with them or buys them it has to be at a price that LOW that Neptune will only agree out of desperation. Just ask the question: WHO ELSE would buy Neptune? The majors certainly NOT as they are all divesting from oil and gas. And Neptune knows that they only have one possible buyer: HBR. So lets dictate the price - or else say no.

Woodmac discussing HRB/Neptune extensively in a web-conference, they posted the link an hour before via LinkedIn.

"What would a Harbour-Neptune combination look like? Watch as Principal Analyst, Neivan Boroujerdi and Product Specialist Nicholas Williams discuss some of the strategic drivers behind the proposed deal."

I dont post the link here, those who are with LinkedIn, just look for Wood Mackenzie

well, China had opened its national oil reserves in July to bring prices down (they filled them up 100% last year during the huge price fall in oil, so clever thing). Then the US also sold around 20% of its oil reserves and India also has started to sell 30% of its oil reserves just mid August. And despite (!) of 3 big nations selling oil from its reserves to the market and OPEC+ lifting production a little, the oil price is holding up. The US has surpassed oil demand of 2019 now. Same for China, where oil demand is up 8% from before (!) covid. So its a very uneducated guess what oil prices will do once China, the US and India have stopped selling their national reserves, which will be the case in October. Also interesting to see is oil storage in the US and worldwide is now at 2019 levels but trending down further. Gas prices have a lift already as - while oil was stored in huge quantities in 2020 - gas was only stored in normal quantities and therefore market now is pricing in possible shortages in winter. Of course we ll not run out of oil or gas this winter to make that clear. But markets will have to fix prices now to incentivise gas producers to explore and develop new gas projects despite of ESG concerns. The world still needs a LOT of oil and gas and with funding for exploration running low plus political headwinds against it, its only a matter of costs: these facts just make costs for exploration and development even higher - and the market has to fix a price for companies to do exploration and development nevertheless. Means for me that we will see gas hold its high prices for some months plus oil rising further. To which level? Well... HBR could serve as a good example: Sea Lion would be ready for development IF prices are sure to stay over 70 USD/barrel. Means IF HBR can hedge them for several years at this level. Means we need spot at least at 80 USD, better 85 USD for it to be considered a "normal risk" for a company. And this for me means that we ll see 85 USD in the mid-term or more, probably entering into a range of between 80 and 90 USD in 2022.

Guys, I just uploaded my updated opinion sheet about HBR. Would be nice if you read and doublecheck it. Any opinion is very welcome.

Btw: with a market cap of 10 bn GBP Harbour would easily make it into FTSE 100. The current entry level is around 6bn.

@Baysil and Plebeens - you re both right. Lot of capex coming and already spent in H2, but that should not surprise too many informed investors. What counts more I guess is not the spent capex in H2, but the very low FCF break even for 2022. We should break even well under 30 GBP in 2022 and are currently priced at around 75% of book value only. So I am not looking for any "great numbers" coming out on 23rd of September for the last months. Lets face it: PMO had lots of capex overdue in 2020 that now had to be spent. Doesnt change the fact that in 2022 all this is done, free float of stocks will be high and Tolmount will add substantial free cash. How the share price will react on the numbers, imo, depends on shareholders either (only) looking at the last months (not as great as some expect, but still solid) or the outlook the company gives for 2022 and the rest of the year.

best solution: think for yourself ????

just saw that HBR has deleted the June presentation and now (only) sticks to the August presentation and that there it says that Tolmount will deliver first gas beginning November (p. 17 of the presentation).
If true (we of course don´t know yet) this will add another 2 months of Tolmount gas production = cash flow to the balance.
So positive upside possible here.

I now expect HBR to have higher costs in H2 than I previously thought though. One-time charges for the merger might be higher than expected. Still bringing down debt further though for year end, but not as much as I expected. Have a feeling that therefore numbers end of september will be solid, but not extraordinary for 2021, but the outlook for 2022 will positively surprise the market.

@soder exactly - and I would add that your estimation for 2022 gas prices is conservative.