Member Info for Sekforde

Dividend yield alone now 11.71%. FCF in next 36 months should exceed current market cap at current brent and gas prices. Just absurd really.

I think Basf want out. They would not have done the deal in the first place if they did not. They have already done well on the cash element. I would love HBR to offer around 175p for about a third of their shares. The money to do this is just sitting in the bank and the mandate is in place.

I think the board will pursue a middle course strategy of (i) paying the dividend (ii) paying down the debt (iii) buybacks. This is my very rough and ready take on 2026: Gross income $9bn, capex (including decomm) $1.8bn, opex $2.35 bn, finance leasing etc. $0.5bn, global tax $3bn = FCF of $1.35bn.

Harbour can borrow new money at around 6% and it is interesting the company has been doing a fair amount of debt raising. I do think risk can largely be eliminated by hedging and we have a very good book for 2025 and 2026. I do not think net debt of around $4bn is significant in relation to a company with an opex of around $14 a barrel and producing 500k boe a day. I myself would like a more aggressive approach. I would buy 15% of the shares each year from a ready seller. I would pursue with vigour the huge potential of Argentina and Mexico whilst keeping the Uk and Norway as an easy income stream. I would however be interested to see what our Norway assets could be sold for? Stevo you may have an insight on this? The market does not trust the Wintershall deal. But I am not sure why. It looks quite alright to me.

Why? Paying down debt saves 6% a year. Buying shares and cancelling them saves 11.5% a year.

On page 24 of the investors presentation there is an interesting reference to paying off between $0.5bn and $1bn of debt in the years 2025 - 2027. Taking the middle of the range figure then that implies paying down debt at the rate of $250m a years. We are told the FCF for this year will be around $900m (on the basis of fairly cautious assumptions). Because of the huge drop in capex in 2026 and 2027, largely maintained production, lower interest payments and largely maintained opex, I maintain that FCF will be significantly higher than 2025 (using the forward graph to determine revenue). But to be cautious I will assume in 2025, 2026 and 2027 the FCF will be $900m a year. If the cash dividend is maintained at $455m and the debt reduction is $250m, that leaves $195m a year for buybacks. The cash yield at 174p is 11.49%. But include the buybacks and the true yield rises by a further 4.92% to 16.41%. I am a huge fan of buybacks. They are beautifully tax efficient. And a very sensible use of some of the company's $1.3bn cash pile.

Peace would be good news for everyone regardless of the impact on commodity prices or the sp of HBR.

The calculations at the moment are very easy. The final dividend for 2024 was 13.19 cents a share which is exactly 10p a share at today's exchange rate. Assuming (as we have been informed) the next interim will be the same, then the annual dividend will be 20p. 20/180 is 11.11% yield. But in its presentation the company held out the prospects of share buy backs "later in the year". It is worth nothing that that prospect was dangled when Brent and gas were at lower prices than today. Deranged Trump seems to have done a deal with China and that has helped lift commodity prices. To give a true yield to share holders you should add in the buybacks as each share holder is gifted a proportionately larger stake in the company. But in any case a yield of 11.11% which is entirely sustainable over time demonstrates that £1.80 a share is too low. Be bold keep buying.

I am not extrapolating. The company made it clear that the capex and tax were tilted towards the rest of the year. However I just think that capex will end up at the bottom of the range because of lower commodity prices and production will be at the top of the range because of the great start to the year. And those two factors could add at least another $200m to FCF.

GS still are immensely bearish on oil prices. And so it makes sense for them to fairly bearish on oil companies. But predicting oil prices is just guess work. You just have to look at the forward curve for valuation purposes and of course take into account hedging book. I am annoyed with myself for you buying more before these results came out. But no one could think they would be this good. Having earned FCF of $700m in the first quarter I am confident the company's implicit forecast of $200m in the remaining three quarters will be pessimistic. They will do better than 465,000 boe and capex will be at the bottom of the new range. I have therefore added a lot today.

The debt is not been paid off. The cash is being accumulated. There is a reduction in net debt as a result. But some of the $1.3bn cash should be used to buy the shares. Immediately. The price remains far too low.

When trying to value any company, the only metric that matters is the likely free cash flow over time. Based on the guidance given in March, I had 2025 FCF at $425M (average $65 Brent and $11 gas $115 x 5 = $575m. And then $1000m - $575m = $425m). So where in Heaven's name does $900m come from on those very same assumptions? True there has been a tiny and favourable narrowing of the range of production (455-475 as opposed to 450-475) and there has been a slightly lower assumption about capex. However nothing begins to explain the more than doubling of the forecast FCF. This is just terrific news and the increase in market cap today of around $300m does not begin to do justice to the revised figures. What it also means is that FCF for 2026 and 2027 will also be materially higher than any of us could sensibly have imagined before today. This is down to the reduction in capex and the opportunity to be much more selective about the projects that proceed.

Far above expectations and even with the much lower gas and oil prices still on track for full year FCF of $900m - more if as seems certain production is around 475,000 a day. Wonderful news.

The guidance was based on starting Triton again at the end of June and only 80% uptime. In other words it was deliberately super cautious. In reality Triton will start at the beginning of June and we should achieve 90% uptime (at least).

The company is sitting on loads of cash. It should take advantage of the mandate tomorrow and buy 15% of its own shares in quick order. Cost about $450m. It would forfeit around $20m a year in annual interest but save over $50m in dividend payments.

I am very hopeful about tomorrow. The key thing is to get better guidance on the main unknown variable which is production. I am also wondering if the good hedging so far has been added to since the last announcement.

Auctus is paid for by Serica. I do not think they have a great track record and are usually relentlessly optimistic. However on this occasion they have almost certainly underestimated production for 2025.

The reason for there being no deal is that Serica judged that Enquest will not make any FCF with Brent at $60 and therefore its tax losses are of limited immediate value. However, I still would have favoured an all share deal with a split one third Enquest and two thirds Serica in line with current market cap. There would have been plenty of costs savings possible. Both boards are top heavy with very high salaries being paid for too many people. Enquest needed the deal more than Serica as it has too much debt for its size.

No trading now until after the OPEC meeting on 5th May. This is always impossible to call. But quite a small reduction in the proposed increase could produce a healthy spike in Brent etc. The recent rally from desperate lows has mainly been to do with Trump threatening Iran and anyone who trades with it. But this will not really have much long term effect . China will continue to buy Iran's cheap oil as it no longer has much to lose from displeasing Trump.

Yes Londoner. I have seen those very broad projections. But when you actually look at likely income based on the forward curve and likely costs based on the company's own figures I come to a much larger FCF. Should have more clarity on 8th May 2025.