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The yield is not 13%. It is $455m/$3015m which is 15.09%. But the article is extremely poor any way. The suggested $4bn FCF 2025-2027 could only be achieved at $80 brent and that is ancient history. Using the company's own guidance and assuming $65 brent, FCF for the period 2025-2027 is around $2bn. However the assumed daily production of 450,000 boe is conservative. All in all the company should maintain its dividend.

Dan the net debt of Exxon is about $18.5bn. But the cost of production per boe is about $25 as against $14. And Harbour's debt is super cheap to service with much of it at around 3.5% per annum.

In March of this year, Harbour forecast $1bn of FCF for 2025 on the assumption of $80 brent and $13 mscf gas. A $5 variation of Brent or a $1 variation of gas each resulting in a variation $115m to FCF. Using the forward graphs and taking into account prices so far this year, we should achieve $70 Brent and $11 gas meaning that the FCF for 2025 would be $540m. But that assumes a middle of range forecast production of 462,500 a day. We know we achieved above 500,000 in January and February of this year and Harbour and Wintershall combined achieved around 500,000 in 2023 and 2024. There have been no unplanned outages reported this year and so I am hopeful we in fact achieve 475,000 a day for the full year. The additional income (12,500 x 70 x 365) of $319m should translate to additional FCF of around $160m giving us $700m FCF for 2025. FCF for 2026 looks much better owing principally to a huge reduction in capital costs and so I am going to suggest $1bn is achievable. That gives us $1.7bn for 2025 and 2026. Exxon by comparison made FCF of $34.4bn in 2024. Given the overall reduction in commodity prices, its fairly modest capex (for its size) and its increasing cost profile it will do well to make FCF of $30bn for each of 2025 and 2026. So Harbour should make in terms of FCF 2.83% of what Exxon makes in the next 2 years. Exxon has a market cap of $462bn. Harbour $3bn. If Harbour had a market cap of 2.833% of Exxon it would be worth $13.08bn. In the end forecast FCF over time is the only way to rationally value any company. There must be something seriously wrong with the market's valuation of one or both of these companies.

Hbr has a market cap of around $3bn and produces around 500,000 boe a day. Exxon has a market cap of around $450bn and produces 4,300,000 a day. Ok of course Exxon has other assets and proportionately less debt (but its costs per barrel are higher and its oil not quite as valuable). However, there is something truly absurd about the market's assessment of relative value.

The real problem for Harbour is the net debt of $4.4bn. With oil at present levels it is impossible to make any inroads into that debt and maintain the dividend. Wintershall looked a great deal when Brent was $80 plus now it looks a truly awful mistake. The prudent thing to do is to reduce the dividend and focus on getting the debt down to manageable levels. The present investment grade rating on the debt is likely to suffer if this is not done. Linda Cook is paid $6m plus a year and she has not delivered at all for shareholders.

Stevo. Bet offered to VOR on 6th March 2024.

Stevo. It definitely was not me. It was one of the real hot headed optimists. The £50 was payable to charity. That I do recall. Gambling debts must always be paid.

I am invested in both. And a big fan of both and the merger. Stevo has I think just won a bet of £50 with someone over the FCF for 2024.

Stevo good analysis. There will not be huge FCF if oil prices remain at the present levels or match the forward curve. The company was a bargain when Brent was above $80 now less so. However, any tie up with Serica could be huge for FCF in 2026 and 2027.

I see no advantage at all in any cash payment to Serica holders. The equity split should mirror the current market caps of each company - so roughly 30% v 70%. But for the Triton disaster, Serica would be net cash by now. Assuming the latter is up and running by mid May, the cash generation of both companies should eliminate the debt of the combined group by mid 2026. I am interested to see what the costs savings might be. A huge number of expensive employees will no longer be needed.

Stevo the Serica Rns says it was released with Enquest's approval. So it is like a joint rns. I think it is a great idea and one which I have been advocating for ever. May not happen as big egos on both sides.

Cannot understand the idea of returning capital to Serica shareholders. Obviously this is all about the accelerated use of Enquest's tax losses. Happy for combined FCF to be used to pay down expensive debt the interest of which cannot be deducted for EPL purposes. Deal may not happen. But it makes sense to me.

The dividend will I think be cut. The combination of Triton outages and the much lower oil and gas prices mean that it is just not sustainable. Besides any spare capital is best spent on either acquisitions within the UK or share buybacks. It would be folly to move outside the Uk as that is well known to the company and prices are much lower because of the tax regime.

It was above 50k at the beginning of October and we have since added around 8,000 a day.

David

Have been reading again the latest Auctus valuations. The figure I always focus on is FCF which they have at $185m for this year. But this is based on an efficiency of just 68% for Triton and 77% for Bruce. They point out that Serica achieved 80% efficiency in 2023. Assuming the single compressor at Triton does not fail again before the second arrives that is way too pessimistic. There is no reason we cannot get to 80% efficiency this year. I think at the moment we are producing around 58,000 boe a day after the recent additions. The assumption for average Brent at $74 is fair in view of the future markets but way way too low for gas at 94p a therm when the future market averages around 115p for the year. Factor all that in and we could easily get to $250m FCF this year and of course much more in 2026. The current annual dividend yield is around 19% if one takes into account that the full 23p will be paid before the end of November 2025 by which time we will be a much stronger company.

R acist views

jamessimon. take your ****** views elsewhere.

They have also assumed $1.30 per pound. Most of our costs are in Sterling. The present rate is $1.23 so that is conservative as well.

Have been looking at Auctus Advisors latest up date. They calculate FCF from 2025 to the end of 2028 at a total of $1129bn. That is vastly ahead of the present market cap of just over $700m. However their estimations are based on assumptions that really do seem very conservative. They have assumed Brent averaging $73.74 for 2025 and then $70 for each of the remaining three years. That is against a present price of $78.50! They have assumed gas at 94p a therm for this year and then 90p in each of the subsequent years. That is against a current price of 110p. They have assumed only 41370 boe a day. By the end of this month we should be averaging 55,000 and even allowing for 3rd quarter maintenance if the Triton compressor holds out then 41370 looks too low.

An announcement about Triton is due any day now. But the higher sp is all commodity price related. In a sense the way it has turned out has been quite fortuitous. We will be selling the same oil in a new tax year at around $3 extra a barrel.