Member Info for Sekforde

I think FCF will be higher because I do not see that there will be any decline in production and the company has already announced a reduction in capex from $2.4 -2.5bn to under $2bn. Opex per barrel should be the same. Financing costs should be lower as net debt is lowered. Tax should be the same. Post hedging gross income looks like being a little lower. I am thinking $1bn FCF this year and $1.1bn next year. Aker BP may generate no FCF at all this year and next.

Harbour market cap $4bn. Aker Bp $16bn. Production Harbour 455-475k boe per day. Aker BP 390-420k boe per day. Net debt Harbour $4.2bn Aker BP $4.5bn. Costs per barrel similar. Decomm liabilities similar. Incomprehensible difference in market valuation. Of course Aker BP is all Norway. But our production is more than one third Norway.

And Fog the Mogg neither my wife nor any of my children would trust me for a moment to put up Christmas lights. You are in good company.

Mike Nav, I do not think that expressing a view that an argument is "facile" is confrontational. You should not be such a sensitive soul.

And yes I confess I was a big fan of buybacks in 2022 when the sp was £4 plus. Brent was $100 a barrel and the UK Government had no plans for a windfall tax. And yes I do think that one should include buybacks when calculating total annual return to shareholders. The company does that in all its presentations.

Nav Mike It is too facile to conclude that buybacks are a bad idea because the sp of the shares has fallen since the previous buybacks. The sp fell as a result of a combination of the windfall tax and the collapse in commodity prices. The relevant question is should not excess fcf be used NOW to buy shares at much lower prices? A $250m buyback (from the reported cash balance of $1.3bn) would eliminate around 6.5% of shares at today's prices. If the total dividend were merely maintained in 2026 it would increase the dividend per share pro rata. Meanwhile the capital expenditure in Mexico and Argentina is already huge. In fact total capex is almost 50% of market cap. By contrast Shell's capex is less than 10% of its market cap. The danger of increasing capex beyond the forecast $2bn a year is that it would not get spent in the most optimal way. So I favour at least $250m a year being spent on buybacks which would enable the dividend per share to steadily increase whilst the debt was eroded and capex was maintained at very high level. All looking very good.

I actually see Serica's 100% north sea exposure as a strength. The fiscal regime cannot get worse and it is likely to improve after the consultation that took place this summer. The Enquest proposed deal was a missed opportunity but there are many others. Any day now something transformative will be announced.

When the company was producing only 180 boe in 2022, it spent $400m on share buybacks. Using its 8th May 2025 guidance of $900m FCF on the basis of $65 brent in quarters 2-4 it looks like the revised FCF forecast should be around $1bn. There is a chance of more if production looks like being above 465,000 boe a day for the year which seems to me highly likely. But assuming only $1bn, I would expect that on 7th August 2025, the company will decide it is safe to use that $1bn (i) to pay (the virtually guaranteed) dividend $455m (ii) to retire the net debt $300m (iii) leaving $245m for share buybacks. Although most of the FCF for this year has already been generated on the 1st quarter, the company will be looking forward to a wall of money in the 1st quarter of 2026 - now just 5 and half months away. It is sitting on a mountain of cash which should be invested in shares that at this evening's close yield above 10% (again!).

I do not think the debt matters at all. It carries an average interest rate of 3.5% per annum. A modest repayment against rising FCF should ensure that the rating improves or stays the same. The real attraction of the company is the incredibly low cost of production particularly in Norway.

Shell had FCF of $36bn last year against a current market cap of $285bn. Its FCF should be around $32bn this year and same again next year. So it does not begin to compare with Harbour valuation wise.

Quite. The FCF forecast on 8th May was $900m. But that assumed $65 Brent and 462500 boe per day. Both now look too pessimistic. The 10% dividend yield is more than twice covered for this year and should be thrice covered for next year.

The FCF for this year should be around $1bn. With lower capex and lower opex, next year it should be around $1.2bn. With just under $2bn being spent each year in capex there is no reason why at least FCF of $1.2bn is not sustainable for the next 20 years or so. Quite obviously a valuation of around $4bn is wrong. But we have been promised share buybacks on top of the dividend yield "depending on market conditions" later this year. I think that will be the catalyst to a saner valuation.

I appreciate of course that one cannot extrapolate too much from one day. But production the day before storm Elwyn was over 50,000 boe. Since then there have been two new wells added. I am assuming the Triton ramp up began on 30th June 2025 and will take 2 weeks. But I see no reason why we could not get to around 55,000 boe by say 14th July. I am expecting the board to surprise the market on 5th August by telling us that (a) production is now over 50,000 a day and (b) that the net debt should be cleared by the end of the year. Not long to wait.

I think we will see several deals soon. But we do not need any. The FCF for the next 30 months is greater than the market cap. Auctus advisers have set that out in the latest briefing but on the basis of extremely pessimistic assumptions about production. In the next 12 months we could easily average 50k boe a day. The assumption for this year and next was only around 44k.

The forecast $900m FCF assumed $65 Brent. We are getting $12 a barrel extra. This is 465,000 x 12 x 365 = $2.036bn additional gross income a year before allowing for hedging. Assuming that is taxed at an effective global rate of 70% that is still an additional $610.80m a year. Enough to buy 15% of the company a year or to increase the dividend by around 30p a share to 50p a share.

Tiny buys or tiny sell cannot move the price of a $4bn company. Do you imagine there exists a group of "shorters" who work in tandem deciding where they would like the price to be on a particular day? How would one join this group of market manipulators? How would initial contact ever be made? How would each member communicate with other group members? WhatsApp? I am afraid this is just silly stuff. There is nothing of the kind going on. It is just a normal market.

Of course the share price of a major oil producer is not being controlled by any "they". It is a function of the decisions to buy and sell by the many participants in the market each making their own assessment of value. I am one participant and I see the share price as chronically undervalued. The present 9.66% yield does not take into account the near promise by the board last month to commence buybacks later in the year. Brent at that time was around $65 but the forecast FCF was still $900m and so enough easily to cover the dividend and buy say $200m of shares. We are now above $75. And 2026 looks far better overall.

It looks far more undervalued than ever before at current brent and Gas prices. We were told that every $5 increase in Brent over $65 added $115M to FCF so we should factor in an additional $230M a year. Using a modest multiplier of 6 to value the additional annual income the market cap should have risen by $1380M since we were at $65. Share buybacks to start very soon.

Nitro not at all. I am really keen on HBR with Brent at $65 never mind $74. But the previous exchange of missiles between Iran and Israel produced a spike that did not last and I want the company to lock in income. You are overthinking about my motives for posting. Chill.

I suspect this spike will be short lived. Israel's attack last night will not affected the supply of oil to the market. The higher price will encourage Saudi to turn on the taps. The company should lock in a stream of income by hedging as all the future prices have risen as well.

There really is not any new news. It is mildly disappointing that the start is at the end of June and not the beginning as Chris Cox previously suggested. But on the other hand the debt has not increased much despite the lack of production, the hedging book looks good and the drilling campaign has all gone to plan. There are not many companies that have no real debt that should be able to produce FCF equal to market cap in 3 years.