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Banbury a $5 increase in the price of Brent if maintained over the year adds $90 to FCF (see p 24 of the presentation).

There should not be any buybacks today as the price is more than 5% higher than the average over the last 5 trading days. But assuming 192500 boe/day a $5 rise in brent translates to an additional $90m to FCF for the 2023. All the forward pricing is higher as well and so far the market cap has risen by only $180M or just 2x the additional FCF for 2023.

Brent is trading above $85. The guidance suggested that that was the figure (together with gas at 150 p a therm) that would give $1bn FCF. Will it last though?

October 2024 of course. Not 2025

One good thing about the delayed results is we should have figures for the debt repayment to the end of March. Also we should have a forecast FCF for 2023 which takes into account the recent falls in Brent (although better today). Optimistic that there will be some meaningful changes to the EPL. In Scotland the tax is unpopular and Labour needs seats in Scotland come October 2025 so may be cautious about condemning any changes.

$200M of buybacks is around 8% of the share capital at these levels. Dividends per share should rise from 24c to 26c assuming $200m dividend is maintained.

Read the article. No real detail but certainly something interesting could happen next week. Following the purchase and cancellation of 2,155,577 shares we are down to 833,919,294 shares. The market cap at yesterday's closing price of 245p is $2.4982 bn. The annual dividend being $200m the yield is $200m/$2.4982bn or 8.006%. Including the share buy backs as yield it doubles to 16.012%. If the EPL were removed on prices below say $75 boe then the FCF for 2023 and 2024 would be sufficient to pay this dividend and maintain the same levels of buybacks at prices down to $65 brent oil and 90p a therm gas. It is not that I am desperately excited by a 16% yield (although that is quite handy!) it is just that if the market saw such an outlandishly high yield as sustainable over a long period it would start to bid up the SP to produce a yield closer to other comparable companies. An 8% yield (dividend and buybacks) would mean an sp of £4.90.

The price of HBR follows the price of Brent. The update was good news. But not unexpected. The dividend yield is a shade under 8% now and the company continues to mop up cheap shares from people selling out for reasons I cannot fathom.

Yes good news and part of the long term future. And I keep returning to the dividend yield. Even after bouncing of the 230p low, it is 7.63% with now 834,369,871 shares in circulation. If Harbour were a FTSE 100 company it would rank 4th behind M & G, Taylor Wimpey, and BAT. But in the case of those companies the dividend is barely covered and looks highly vulnerable. $200m a year is small change for Harbour even with much lower prices and the EPL and of course one should really double the dividend to account for the buy backs.

And we are still a long way from $65 brent. One would also hope and expect that at $65 brent the company could cull some CAPEX by about $100m to achieve FCF of $500m. The buybacks continued yesterday and the banking crisis seems to be all but over. A mere blip of no consequence.

Oil and gas are big components in all the indexes and peak oil and gas was in the summer of 2022. The inflation rate could fall to around 2% in a matter of months well ahead of the Chancellor's forecast of 2.9% by year end which of course did not take into account the latest carnage. Hard to constantly look ahead but lower energy prices and interest rates do cause an increase in world economic activity as well as reducing the cost of UK government debt. The Us should start to replenish its strategic reserves and there is a prospect that Saudi and its new friend Iran will seek to trim production to prevent falls below $70 brent. So if we can get through this minor banking crisis it could all work out ok. A continuation of the share buy backs today will show there is no change in the intended distribution to shareholders.

I do not think we should count on a increase in the price of oil. However there should now be a big fall in the inflation rate and with it a fall in interest rates. For any one interested the pure dividend yield is now 8.54% or 17.08% if we include the buybacks which one of course should. FCF looks like being between $550m and $600m if prices remain at current levels in 2023.

There is a real prospect that wherever investments occur the national government will increase taxes. It is precisely because the UK government has introduced the EPL that assets in the north sea are so very cheap. I do not fear Labour. It has gone remarkably quiet about extra tax as commodity prices have fallen to pre- invasion levels and below. So long as the company is investing around a $1bn a year it should evolve into something worth a lot more than $2.5bn.

The sneaky acquisition I would again advocate is little Enquest. It would add an extra 44,000 boe a day. It would cost around $500m. It would add $200m FCF for 2023 and 2024. It could be bought for all cash so not diluting shares. The combined companies could then knock off $100m from CAPEX and the same from OPEX to give a combined FCF of $1.1 bn. Enquest has 12 years of reserves and very large tax losses. But there may be other options at even lower prices.

1. Yield. Following 840000 shares purchased in the last three days there are 835,234,871 remaining. The market cap is therefore 248.5 x 835,234,871 x 1.217 = $2.526bn. $200 m in dividends gives a yield of 7.91%.2. Buybacks. No reason to think these cannot continue at $70 brent and 125p a therm gas. So add another 7.91% to arrive at "true" yield.3. FCF. Using average brent of $75 and average gas 125 per therm for 2023 and applying the guidance we have to reduce forecast FCF to $700m. But very healthy against a market cap of just $2.526bn4. Debt reduction. Balanced sheet improved by $300m over year and net debt by end 2023 down to $500m.5. Good hedging done for oil in 2024 and not too much bad hedging for gas. 6. Review of EPL underway.

They have announced $200M a year. $100m final and $100m interim.

The dividend yield is now 8.264% or double that if you include the share buybacks. Neither in any danger at all even at $70 Brent.

How on earth could it be worthless? There are still substantial tax losses to use and the FCF (even at these very low prices and assuming the existing EPL) is well above $600M for 2023 and 2024. We have had some really bad hedging on gas but the hedging on oll and very recent hedging on gas looks really good. Of course the Government may well decide to modify the EPL as the entire justification has gone completely.

The least interesting postings are the ones that claim special knowledge of what is going to happen to the sp. The sp has fallen because of the double EPL and now the collapse of oil and gas prices which no one could predict. Of course the sp could go even lower or bounce back. However at $70 brent and current gas prices, neither the dividend nor the share buy backs are in any doubt. On that basis the shares are yielding over 15% (dividend and buybacks), the small net debt is still being paid down. The further good news is that any M and A will be on much more favourable terms. The board were right to wait.

Not long now for the budget. The FCF guidance figure published on 9th March of $1bn assumes $85 brent and 150p a therm gas. Applying the forward graphs for oil and gas, we are down to $800M FCF. Enquest should have FCF for 2023 of around $200m at these lower prices. It has a market cap of $400M. Its long suffering shareholders would probably accept $500m. That is a sum available in cash to Harbour. Harbour's present net debt should be around $600m Enquest's around $670m. So the combined net debt would become $600m plus $670m plus $500m (spent on the equity) or $1.760 bn. The FCF of the combined group would then be $1bn again. However that figure should be higher if savings are achieved by replacing expensive Enquest debt servicing costs with cheaper Harbour debt servicing costs and a reduction of Enquest's bloated production costs. A floor on the EPL would make this very attractive indeed given the huge tax credits that Enquests has and its 12 years of reserves.