Member Info for Sekforde

The debt is now very small in relation to BPs size. A debt free company is very attractive to risk adverse investors. Looney has always recognised in every presentation that shareholders own the company and their interests are paramount - as they should be. BP shareholders have had a torrid time over the past 22 years. But it is all going to come right.

The buy backs mean that shareholders who keep their holdings own an ever increasing proportion of the company. If the market cap remained the same and $14bn worth of shares were eliminated then the share price would rise by 14.27%. The share buybacks force the price higher which rewards shareholders in a more tax efficient way.

Meoryou thank you. I think BP is an extraordinary business. What particularly amazed me was how much debt it paid back in the 2nd quarter. $27.457 bn reduced to $22.816 bn. One only needs to project forward to the end of 2023 and BP becomes debt free. The relevant question then will become, what happens to the free cash flow which at present is being divided in a ratio of 60:40 (balance sheet buy backs)? As we mover through this year and next year both the company and the market will start to supply an answer. I do not think it will be more investments as BP is doing as much as it can sensibly manage. This free cash flow will I think also be paid out to shareholders either as additional buy backs or higher dividends. So with the yield calculated as I think it should be calculated the sp is clearly far too low. I am extremely keen on Harbour Energy where the free cash flow over the next 2 years is not far off its entire market cap. Half years results on Thursday should be stunning.

The present pure dividend yield at the closing price in London 446p is 4.46%. The new quarterly dividend is 6.006 or 24.024 per annum which is 20.36p in sterling at current exchange rate. The market cap is $98.1 B but the current rate of buyback is $3.5 bn per quarter. Assuming maintained that is $14 bn for the full year. The buyback yield is therefore 14/98.1 or 14.27%. The true yield 18.73% (4.46+14.27) Buybacks are mathematically the same as paying a dividend. BP is by far the highest yielding stock in the FTSE 100.

£4.71 Sekforde
£4.60 NSS

Persistent and aggressive share purchases. 648,281 today at a cost of $3,040,762.

NSS. £4 could be a distant speck in the rear view mirror this time next week. Brent up since we closed. BP moving higher in New York. Find the volatility bewildering.

Not for me. I believe in taking risk. BP is excellent value too and has out performed Harbour in the last three months or so. But BP cannot double in a year whereas Harbour could. There are actually riskier options such as enquest which has huge debts relative to its size.

It would not affect my life. I am philosophical about risk and reward. I do not let losing money get me down. For many people it causes so much anguish I tell them not to do it at all. I am also aware of the fact that there is so much hope and expectation on these results that anything a tad short can cause mayhem.

I really do not believe there have been any scams or market manipulation. I think there have been some forced sellers or bored sellers and not enough coverage of what is a fairly small company. Few people I speak to about investments have ever heard of Harbour. They will one day.

I look at it this way. The house I sold was yielding 5% gross on its value. It involved hassle. Dealing with tenants gas safety epc certificates etc. I never paid for it in the first place. It was given to me by my ever indulgent grandmother who loves bridge mathematics odds gambling etc. Looking at some of the good posts on Tolmount I am thinking the free cash flow could be way more than $1.7bn for 2022 which was the year of bad hedging. I am gambling with money that I do not deserve and I have never done anything for and that somehow makes it easier to be bolder especially when I see a 30% true yield on the horizon. I convince myself that I am honouring my grandmother by ruthlessly applying logic and mathematics. And to do it by gearing up with IG is too hard to resist when the fundamentals are so sound. But the 25th better not disappoint in any shape or form. Linda you have been warned.

Infor your reasoning is impeccable with regard to SQZ. I think the market sees oil companies as very risky. If commodity prices collapse then those with large debts will go to the wall. This is why this rapid repayment of a now quite small debt should be very good for Harbour. The company cleared $600 M in the first quarter. It will be extremely interesting to see the progress made in the second quarter. We should have much higher CAPEX and there will be lower production overall but significantly higher prices and of course Tolmount. A debt pay back of $700M is possible, but even $400M will prove to the market that HBR will be debt free by the end of March 2023. I do not quite know whether $200M handed to the brokers presumably after 16th June 2022 to pay for the shares will limit debt repayment in the second quarter or whether this sum will have been spread into the third quarter. We have of course had pretty good prices since 30th June and so as of 25th August 2022 it is inconceivable that the total debt will not be below $1bn.

Good summary. There are 888,832,505 shares left. (Four eights in a row must be a good omen). 888.832.505 x £3.96 x $1.19 = $4.188 bn market cap. An increase in dividend to say $300M a year (chump change) would give a forward yield of 7.16%. 45000 shares sold at 3.96 gives £178,200. Allows a position of £712,800 (equivalent) with IG. IF no change in sp over a year your account would be debited £21,546 interest and you would receive £51,321.60 dividend adjustments. So you would "win" £29,775.60 net tax free. It is really of course just gearing up and the risks are obvious. But IF we are right and (heaven forfend) the shares go up well extra turkey all round this Christmas!

On spread betting. It is the answer. 3000 a point is the equivalent of £1.2M at £4 a share. But you only need stake £300K. No tax payable on winnings and dividends credited gross to your account. I did sell a house and transferred it over. If Harbour goes to £5 the profit would be £270,000. if it falls to £3 the loss would be £330,000 if you close your position. You pay interest on £1.2M at about 3 %. Did have a good run on BP so the loss on Harbour now is not too bad.

I have brought down my average to 410. So still losing. But far better than a month ago. I was boasting to the world about how clever I was with those 500 plus punts. Horrible when Harbour touched 298. If only we could be sure about anything. But now all in on Harbour. No other positions.

Hi Rookie. I was encouraging you and not being at all critical. 45000 shares is plenty. But I have bet the house. I am 3000 a point long with IG. I see 25th August as a complete watershed. Going for broke, Has to be done.

Back your judgment. Don't complain about the market's valuation. Buy more. Get rid of the chaff.

24/7 ramping alert! I do not know from where Goldman Sachs derives its number. 609p why not 608p?. However a conservative assumption is that the debt will be all cleared by March 2023. Then what happens with the free cash flow of say $1.7bn per annum? (I have not forgotten the windfall tax but that is covered by assumed lower and soon no interest and higher prices as hedging unwinds) Yes there may be additional CAPEX of say $600M per annum to take us to $2bn a year. But the board will still have $1.1B to pay out in additional dividends or share buybacks. If it chooses to pay it all in additional dividends the yield would be $1.3bn ($200m plus $1100M)/$4.25bn or 30.5%. A CAPEX spending up from $1.4bn to $2bn is more than enough to increase present production levels and reserves. So a mighty dividend is truly affordable. It is not going to happen. I think there will be more buybacks instead but as soon as the dopey market participants work out how much is on is way to long suffering shareholders then 609p will seem very low indeed. As for our present valuation is remains (even after this little surge forward) a complete and utter joke. But also an opportunity for tremendous profits for the brave.

Another 475,453 shares taken out today.

I have given up trying to work out why gas is rising and oil is falling. The two should surely be linked. At the moment the sp seems to slavishly follow the Brent price and ignore the gas price. But a decent chunk of both are not hedged and the hedging on the oil does not seem quite as awful as it did in March. We have not got long to wait now. So many questions will be answered: Debt level, hedging strategy, windfall tax, CAPEX, buybacks and dividends. And of course progress outside the North Sea. Market will react well to an increase in the dividend which is is very affordable. An increase by 4% costs nothing with 4% of shares cancelled. But I expect a minimum of 20% to give a dividend yield of over 6%. I also think the market will work out that the debt will be gone completely by at the latest end of March 2023. That totally changes the risk profile and with it the credit rating which is currently BB.