Member Info for Obsolete

This board is being ruined by hysteria, covid rants, government plots and other such nonsense.

The bottom line is HBR is doing pretty well and the wft slows progress but doesn’t stop it.

Do we know yet that corp tax will be going up for oil and gas as well? I havnt seen that.
But please do post your calcs afterall this is what a discussion board is for.

The proposed 35% rate will probably increase HBR wft bill by somewhere between 100 and 200m ie up from the current 400m to 600m. It equates to one months cashflow. Surely HBR can find a North Sea project to sink 600m into over the year?
Meanwhile 7.8mmboe come off hedges of 60 and hopefully produce 100. So that’s an uplift of 312m.
Debt should be paid off by next summer leaving potentially 1bn in the bank by year end.
I’m not sure what all the fuss is about.

The increased wft is a disappointment but not a disaster. An article in the independent suggests
“But researchers from anti-fossil fuel campaign Uplift calculate that, unless rules are changed, a quirk in the way the levy is designed could actually mean taxpayers stumping up more in relief on investment projects than the investment is worth.
Energy giants currently getting 91p in relief for every £1 they invest could instead receive 109p under the new regime, effectively meaning the taxpayer is paying for the investment and handing over a further 9 per cent of its value in additional relief.”

If that’s the case then HBR needs to stop moaning, accept the new regime and get on with some new development in the North Sea to get the best out of the reliefs. Cambo is up for sale and sounds like a suitable money pit to sink cash into rather than giving it away to the treasury. Lots of new licences up for grabs too. I dont see why they can’t expand internationally as well as in the North Sea.
Debt is going to take longer to pay off. This years payment of 400m wft is due in December and January. There’s the latest buyback to pay for and I expect another one in q1. Therefore debt is likely to be paid off in the summer of next year.
Still not bad at all.

Oil hedges reduce from 19mmbls down to 7mmbls in 2023. That’s 30kb per day coming off hedges and realising hopefully $100 instead of $61. That should add about $427m to revenues over a year.

HBR IR need to put together a decent roadshow and get management out there selling the HBR story to institutional investors

It seems to me the market is not forward looking with HBR and is waiting for the real deal to be posted in results. It has to an extent been a jam tomorrow stock for certainly the past year. Those that did their research on this stock ages ago can see the effects that the unwinding oil hedges will have over 2023 and especially the gas hedges in 2024, but the market seems nonplussed and isn’t pricing it in yet. The unravelling of the EIG holding was always going to cause a few bumps but not change the direction of travel. But a complete lack of TR1s from major shareholders show that there isn’t enough institutional support to get the price moving yet. I think this will change as govnts globally encourage institutions to back oil investment to help ease the energy “crisis” and make up for years of underinvestment. In the meantime it seems higher oil and gas prices are here to stay in my view. Depending what price you got in - my average is 3.45 then we have a rising dividend thanks to the buybacks and a pretty rosey outlook, so sit back and wait for the rise. I can’t see much going wrong here except a labour government, another round of covid or a meltdown in oil prices, none of which appear to be a near term threat at the moment.

Just picking up on a few of this mornings comments - there are no market makers setting the price for SETS traded stocks of which HBR is one of them. SETS is an open order book system with automatic matching.
Back to HBR and it’s all a game of patience as debt comes down and the hedges come off. Clearly the windfall tax hasn’t helped sentiment but this time next year I’d be amazed if we havnt hit the 700p mark

Operationally strong but debt is a disappointment.
Been in this 14 months and think there still a while to go before it comes good.

Well a year ago I thought we would be at 600p by now. If it wasn’t for the negative sentiment from the WT we probably would be. HBR have sensibly kept quiet about it’s impact and lobbied govnt instead. I agree that boastful claims from the BP CEO just ended up being a “gerald ratner moment” and am glad HBR resisted behaving so stupidly.

Ah ok I see 4.50 is taken so I’ll go 4.54

£3.84 Bushmanbob
£3.97 OWLS
£4.10 fft100
£4.12 Banburyboy
£4.17 Deadly4U
£4.19 bp.or.not.2b
£4.21 Keepsteady
£4.32 peterlowen
£4.35 Beetham
£4.38 nICKEL 123
£4.46 Plebleens
£4.48 Emerald
£4.50 Bawdeepinit
£4.53 GordonAlbert
£4.54 Obsolete
£4.55 steve17
£4.60 NSS
£4.65 Strike
£4.69 Stingray77
£4.71 Sekforde
£4.75 KeepItSimple
£4.78 Not My Job
£4.84 Wellintervention
£4.87 NewYorker
£4.90 BacchusII
£4.95 Missionimposs
£4.98 morganna1
£5.00 Dartman501
£5.07 TopCat81
£5.14 LuckyDog
£5.25 ButterscotchLad
£5.35 Tess
£5.40 LegalEagle1
£5.48 Givingthelowdown
£6.09 kign

Strike - you left my 4.50 out?

I’m going for 4.50. Not because I think that is fair value but because I remember on FY results in March there was literally no movement at all on the day. It took a few days for the results to sink in and the subsequent climb to 5.38. I think HBR is still below the radar. But I see 600p by year end.

£3.84 Bushmanbob
£3.97 OWLS
£4.10 fft100
£4.12 Banburyboy
£4.17 Deadly4U
£4.19 bp.or.not.2b
£4.21 Keepsteady
£4.32 peterlowen
£4.35 Beetham
£4.38 nICKEL 123
£4.46 Plebleens
£4.48 Emerald
£4.50 Bawdeepinit
£4.50 Obsolete
£4.53 GordonAlbert
£4.55 steve17
£4.60 NSS
£4.69 Stingray77
£4.71 Sekforde
£4.75 KeepItSimple
£4.78 Not My Job
£4.84 Wellintervention
£4.87 NewYorker
£4.90 BacchusII
£4.95 Missionimposs
£4.98 morganna1
£5.00 Dartman501
£5.07 TopCat81
£5.14 LuckyDog
£5.25 ButterscotchLad
£5.35 Tess
£5.40 LegalEagle1
£5.48 Givingthelowdown
£6.09 kign

Thot I have to disagree. The FCA has some of the highest regulatory standards in the world. They wrote much of the EU regulation that is still in use today. The result is one of the safest places for investors to put their money globally and our FTSE100 is the envy of the world. Every single trade in the U.K. market goes through FCA systems and irregularities are followed up. It’s just that you don’t hear about it.

I think it’s clear that the market is reluctant to chase HBR higher because it knows that there is a large amount of ex-private equity that may or may not sell and therefore the market thinks why buy the stock only to see it maybe get sold into by the EIG concert party? But sooner or later the selling pressure will ease and then there will be not much holding HBR back as fundamentals become irresistible to the market. No one wants to miss that boat.

The question as to why “EIG” are selling has been made a few times. “EIG” in HBR’s case was a concert party of lots of different investors including firms such as Noble as well as people or entities such as the Helmsley charity which have connections to EIG itself all collectively acting as one body. They formed the concert part when oil was at $40/50 a barrel to take out PMO. No one knows how much cash they actually put in or what that might translate to in terms of todays HBR share price. But it stands to reason with oil prices at double what they were, that some of the “EIG concert party” might like to trim their holdings having maybe doubled their money or more since initial investment.
I find it encouraging that Noble, despite being under massive pressure to pay its debts, has not yet released a TR1 showing any material reduction. This says to me that they are resisting selling because they know there is further upside to come.

I think the company has authority to buy back 15% but has announced a proposal for only 5% so far. Perhaps a further proposal will be announced tomorrow.
I will also be looking for details on the hedging - Oil hedges reduce from 19mmbls down to 7mmbls in 2023. That’s 30kb per day coming off hedges and realising hopefully $100 instead of $61. However I don’t know when in 2023 the hedges come off. It could be in January in just 5 months time or at the end of 2023 which is more like 17 months.

Interesting to note from the article that HBr tried a 10bn bid for Santos that was rejected. How would they manage to rustle something like that up unless with help from EIG? It suggests to me that HBr will more than likely look for acquisition opportunities outside of the NS. With Timpan coming in, perhaps HBR should be looking at accumulating in that area.

Noble Group are a poor shareholder to have and in dire straits. They have been on the brink following an accounting scandal. Their shares have now been freed from the EIG concert party and are available to sell in the market. I expect they are selling today and will get out aggressively as they appear to be struck for cash. Expect a bit of weakness in the share as they unwind.
https://www.ft.com/content/f1c26ced-4f38-39a1-afa6-e3b0599dcdc5
They appear to have initially invested in Harbour when oil was at $50 so are quite plausibly making a profit even now selling the shares at these levels.

SQZ should have mopped up IOG months ago but sat on their laurels and have now become a target themselves. Glad I sold out before the results but think the merger with KIST will happen particularly if their well turns out to be a duster.

Isn’t the next well in the area to be drilled Repsol's Rencong-1? Not sure if it’s been started yet or not