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Londoner - I cannot find any reference to the non-voting shares getting a premium. However taking only the voting shares (1440,116,191) x 148p x 1.33 (exchange rate) = $2.834bn. $380m/ $2.834 bn = 13.41%. I would be interested to see your projections for 2026 FCF. Mine are as follows after the recent rout: Income 460,000 (boe) x $62 (some good hedging ) x 365 = $10.41bn. Opex $2.35bn. Capex $1.5bn (sharply down on previous forecast of 2bn). Global tax $2.5bn. Decomm $600m. Finance leasing and miscellaneous $2bn = $2.06bn. Can't be right. But not sure which is my figures is wrong.

I think it is more likely that the they announce that there will be no deal. The main attraction to Serica was Enquest's tax losses. But for them to be useable there have to be profits. The sad truth for Enquest is that at $60 brent and 75p a therm gas it just is not making any. It has too much debt and is having to spend $60m a year on decommissioning. I was a tremendous fan when brent was $75 and gas touching 100p a therm but those days are over. Serica will do fine on its own will no cash tax to pay this year anyway.

I would say the top priority now is maintaining FCF. For this year 50% of production is hedged. But the board should slash any capital or opex expenditure which is remotely discretionary for this year and 2026. But even if we average $60 boe for 2026 and achieve just 450,000 barrels a day that represents a gross revenue of $9.855bn.

The IMF revised figures for forecast economic growth last week as follows: World 2.7%, China 4%, and India 6%. Consumption of energy tends to rise with economic growth. And with much lower prices than last year it is difficult to see consumption being lower rather than higher especially in India which continues to power ahead. In fact lower energy prices are a classical stimulant to economic activity. But as we all know, production declines without investment and lower prices result in fewer projects being sanctioned or pursued. At some point the worm will turn. Londoner you are right about the dividend yield. There are 1,691,590, 026 shares in issue (including the non voting shares which still get the dividend). This means the market cap in $ is $3.41bn. The total dividend is $455m so the yield is $455m/$3.41bn = 13.3%.

In the last presentation the Board based its production guidance figures for the year (33,000 - 37,000) on two highly conservative assumptions (1) resumption of Triton at the end of June (2) 80% up time thereafter. But Chris Cox made clear that he hoped and expected Triton to be producing at the beginning of June and hoped the 80% assumption could be bettered. With all the summer maintenance carried out whilst Triton is down and operators like Enquest achieving 90% up time for the entire year , I am going to assume (1) production does indeed start on 1st June 2025 and that a 95% up time is achieved for the remaining 214 days of the year. Given production of more than 50 boe the day before storm Elywyn and the fact that work was being carried out on Rhum at the time and that Guillemot and Evelyn were not producing and some natural flush it is quite possible that for those 214 days production is in fact 48500 boe equivalent. I am going to assume an average realised price of $64 (higher than current prices because 40% is hedged at a minimum of $67). This would give us a gross revenue for those 214 days of 48,500 x $64 x 214 = $658M. I deduct opex of $330m x 212/356 = $191m Capex of $235m x 212/365 = $136M Finance costs of say $10m and zero tax (as overpaid last year) and that leaves us with $321m at year end. Our net debt at the start of June should be around $120m and so by year end we will have net cash of $200m less the dividend. What is not to like?

Trump is just beyond stupid. Biden authorised sales from the strategic reserve at up to $100 a barrel. Now that same oil can be bought back at less than $60. So very smart move by Biden. But filling the reserves should help put some sort of floor on further declines. There is in fact no a glut of oil at the moment. There is just a market perception that there might be in the future. Let us see.

The government has accepted in principle that there should be a decoupling of gas and oil. Brent prices are way below the threshold now so we should expect some relief. I accept the science of climate change and think it does need to be urgently addressed. All the consequences are very bad indeed. However, developing the north sea and carbon capture etc is much better than importing fossil fuels from the US which has abandoned science completely.

And on 8th May we should get Harbour's production figures for the first four months of the year. We know that January and February were around 500k. If that has been maintained then that would be excellent news because it would imply the company will finish the year right at the top of its range of 450-475 or may be slightly above it. 15% yield looks safe.

Curtail supply

I think we really have reached the low point. A reduction in price of brent from $80 to $60 is bound eventually to feed through to increased world wide consumption especially in very price sensitive countries such as China and India. Meanwhile there are not going to be any new wells in the US which should start to curtain supply. The opec meeting on 5th May could easily see some reigning back of production for June. The fact that Habour is still able to borrow at around 6% is good news.

So this is how I hope things might look in 2026. Revenue ($62 x 475,000 (boe) x 365) = $10.74bn less opex $2.25bn ($13x 475,000 x 365) less capex $1.5bn (reduction from forecast 2bn owing to lower commodity prices) less debt servicing costs $300m less decom $1bn less global tax $2.5bn less miscellaneous including leasing $1.5bn = $1.69bn FCF.

Hi Auson. I am not suggesting that it would ever have been possible to hedge forward at $80. But had Harbour hedged forward at anything above $70 the FCF for 2025 and 2026 would have been secured and the benefits from the deal guaranteed. As the spot price comes down so too do the forward prices. But gloom can turn to optimism quickly. I do not think the OPEC cartel would want to see prices any lower than around $65 brent and the organisation can make very modest cuts to achieve that without prompting the US producers to begin a new drilling campaign.

Modestus I did sell my Harbour shares and still have good stakes in both Enquest and Serica and they have not performed well although marginally better than Harbour. All have suffered because of the Trump inspired commodity rout. Enquest and Serica as you know may do a deal which will be transformative even at current prices. I have over the last few days been tempted back into Harbour because at $64 brent and gas at 75p a therm I still think it could generate $1bn of FCC in 2026 and 2027 so a $3bn market cap looks far too low. Harbour has a huge debt but the interest is low and I do like its $13 -14 a barrel opex.

Linda Cook has not performed well for shareholders. It is no good boasting about going from zero to 500,000 boe a day when under her watch two thirds of shareholder value has been wiped out. I was a big fan of the Wintershall deal. It made sense when Brent was around $80. LC could have locked in that value by aggressive forward selling and it would still look good. But she did not. There was some hedging but not nearly enough especially for 2026. At current Brent and gas price FCF is barely above $300m for this year so debt will rise and not fall if the dividend is maintained. That may not be so if production is at the top of guidance. It is too late to hedge. What she should do now is forego her (excessively generous) bonus (as should Alexander Krane) and cut operating costs and capex next year by at least a billion. FCF needs to be hitting about $1bn even with $60 brent.

The current market cap is $3bn so Londoner 7 is basing his maths on paying the present sp. And why pay them more when they want to exit?

Neversell Harbour is not able to borrow at 3.5%. That is just the interest payable on most of its bonds that it acquired. It would probably have to borrow at around 6-7%. But the additional interest payable is still much less than the savings on the dividend payable on the acquired shares. The present low sp has nothing to do with any market manipulation which is impossible for a company of this size. It is just a function of the low oil and gas prices which has led to a large collapse in the likely FCF for this year - now around $310m on 462,500 boe per day.

The debt costs around 3.5% a year. The dividend payable on each Harbour share is around 15% which of course is saved if the shares are bought and cancelled. So I would say a much better use of capital to buy shares at the present prices. But there would be a need for more hedging forward to avoid the risk of a further fall in commodity prices.

It was all discussed in the recent presentation. See Alexander Krane at around 2 hours 4 minutes. Authority is being sought in the forthcoming shareholders meeting.

Yes Harbour are seeking a mandate at the next shareholders meeting to buy their shares direct. I would offer for all of them at around 160p. Huge gamble because it would require all available cash and borrowing. But in the long run .....

I do not think company balance sheets of assets and liabilities are a reliable guide to valuation of oil and gas companies. The true value of assets falls dramatically when the price of oil/gas falls and that is what has happened. Forward FCF is much more important. Using Harbour's own published guide and assuming Brent and gas prices perform in accordance with the forward curve, we are down to around $310 FCF for 2025 at 462,500 barrels a day. That would be insufficient to cover the present dividend. However the silver lining remains the likely top of the range production and the sharp diminution in capex next year.