Member Info for miles44

adding to the last post: 2021 2022 2023 2024
Cash Flow per Share in USD 1,85 3,03 2,51 1,76

have a good weekend all of you

Some already updated analysts numbers... with some comments:
1. They re seeing debt reduction a little bit too negative, thinking that end of 2023 HBR will still have debt, which is highly unlikely
2. They re forecasting revenues to drop by 10% per year, which I think is too negative, given HBR´s ability to replace reserves plus they are (like about all analysts) calculating with lower oil/gas prices than the current one´s
3. What is baked in here (and that´s good) is HBR´s inherited tax losses from Premier Oil, they will be used up end of 2023 with the WT tax, meaning that 2024 HBR will pay substantially more taxes. BUT: of course we all know that in 2024, HBR will be a different company, probably with some major assets outside the UK, so I´d take the predictions for 2024 with some caution.
4. What one can see with these numbers is that: with a PE ratio of under 3 HBR is undervalued. One can also see that the market stays rather negative for the longer term outlook (2024 and further), pricing in a major fall in revenues and earnings. This is where I think the market was and is wrong.
5. The share price will adapt to the fundamentals, but only once several shareholders like GIC and others have sold out. The main reason for the share price not going up with all other oilers last year was former creditors and some old shareholders selling,GIC was responsible for the shareprice only going up to 520 and then going down, selling over 10% of all shares and who knows if there are still other shareholders wanting to sell out. As a matter of fact though, this selling will end one day. But of course such a restructuring of major shareholding takes a lot of time as we saw and see.
So here we go for the numbers:
December 2021 2022 2023 2024
Enterprise Value (EV)2 6 580 6 170 5 426 4 412
P/E ratio 41,3x 3,25x 3,56x 5,86x
Capitalization / Revenue 1,27x 1,02x 1,08x 1,12x
EV / Revenue 1,89x 1,26x 1,18x 0,99x
EV / EBITDA 2,71x 1,70x 1,56x 1,37x
Price to Book 8,87x 2,80x 1,73x 1,57x

agreed. to comment on the windfall tax once more... the good thing is that 1st: the tax is now priced in. 2nd there should be some fiscal stability now until the end of 2025.

touching the 200 days Moving Average

Jefferies is calculating with 107 M USD of additional taxes in 2022. Thats about the amount HBR saves on interests from paying down debt in 2022. So, not nice, but no big deal. As for the 230 M USD of taxes in 2023, thats more substantial but still not a game changer as HBR will be debt free mid 2023. I bought more today and will continue to buy more if it goes down more.

thx Soder

or is there an analysis out from Jefferies? any link?

you got that as an email from HBR IR?

you have a link to the article?

I asked several competent persons and all - before going into detail - told me: its just accounting transactions. Meaning: of course you can try to understand and get a PhD in accounting. OR: you trust us that it doesn´nt change anything in the valuation of the company. And it is nothing abnormal. So I decided I got other things to do and trust these persons (I trust them anyway so that part wasn´t difficult)

https://www.telegraph.co.uk/politics/2022/05/24/windfall-tax-within-days-boris-johnson-tries-move-partygate/

so yes, we might get a windfall tax in the next days. Does it explain why HBR is down another day today? Well: Enquest, Hunting, Serica, Wood Group: all up. So I guess that´s the reason people might believe. And its certainly part of the reason. But there are 1 or 2 bigger shareholders here selling for several days already, putting pressure on the price.

If you ask why there is no RNS then ... well: wouldn´t be the first time the company selling violates its obligation to announce it. Wasn´t it the same thing with Premier at the time? They might have to pay a penalty for it in 2 years or so ... take that into account and still decide to sell without informing anyone ...

So what we have is the companies fundamentals and a sound brain to look at what we get for the price. And I say: it´s bargain time.

nothing to add here. good decision. I bought today. Not all in, not selling everything else, but HBR has become a huge portion of my portfolio during the last months. good company, good management, still mostly overlooked by investors, even though in FTSE 100 and great value. PE ratio should be a little over 3 now, P/FCF under 3 as you mention. And I personally like it that they are ready to reinvest their cash flow big time.

plus with todays heavy volume I guess we have seen another wave of GIC selling ... probably they are almost done then ...

@Stevo12 I just attended the AGM and I´d say you are right. Very professional team plus highly competent board. They know what they do. And they deliver what they promise. Not like many others. In the longer run, the market will more and more appreciate this. Entering the FTSE 100 this early was quite lucky: Fortune favours the brave. All is fine with this share. Those who started buying last year are already rewarded and this will continue.

#me too :)

Harbour has made it clear, that they are not looking for further North Sea expansion, but want - as a second step after buying Premier - expand internationally. I think this is the right decision even though, bargains can definitely still be made with UK oil companies. Right decision because as @kign mentioned: if you are too focused on one region/jurisdiction, you get dependend on politics. A don´t think, a windfall tax will be initiated, but it shows that international diversification is in general nothing bad. As for the timing, Harbour´s share price is lagging behind most other oilers and I guess it would be a good decision to first wait for FTSE 100 inclusion and the buyback programme to lift the share price to around 8 GBP before considering M&A using equity. Another possibility that also would take time, would be to wait for 2023 and use cash and credit as the company will be debt free in around 12 months ... companies to be bought are getting rare now ... but I guess HBR is explicitly targeting for assets being sold by major oil companies as part of their "decarbonization efforts" ... and these will still be available next year

read somewhere that HBR IR said they will not RNS the start of Tolmount.....

HBR now is no 1 in market cap in the FTSE 250. And has surpassed the last 9 companies of the FTSE 100 in market cap. The annual revaluation of FTSE indices will finish June 22nd. HBR might be in the FTSE 100 in 2 months. But of course, it´s too early to tell, as many things can happen in the markets in the next weeks...

https://www.energyvoice.com/oilandgas/403820/navitas-sea-lion-falklands-harbour-energy-rockhopper/

Harbour has managed to get payed for the exit. Good news:

"Navitas is acquiring Premier Oil Exploration and Production for an undisclosed fee, which covers Harbour Energy’s Falkland Islands licences."

Given the fact that the company plans to get permission to buy back 18 % of its outstanding shares. Seems management is getting serious with it now. As the court decision will be in July/August, we might see these share buybacks starting in autumn. So good news for all long-term holders indeed.