Member Info for Sekforde

And what I like about the language used in the RNS is "irrevocable and non discretionary". I read that to mean that Harbour has sent over $200M and entered a contract requiring the brokers to spend the lot by Christmas. That means buying over S1.5M every trading day. Just wait and see the effect of that in a tight market with the added pressure of short sellers running for cover. Hugely over exposed myself. Betting the house now. But have just added.

One thing is for sure this buy back announcement came in the nick of time. BP is down over 4% today and HBR would probably have followed suit. I bailed out of BP in preference to going all in on Harbour and for several months thought I had made the most terrible mistake. Now it looks ok.

In a way lower prices will be ok. If in a year's time we see oil back at $90, the inflationary pressures will be eased and with it pressure on interest rates. The windfall tax will be heading for the chop.

Of course the board is not intentionally trying to lower the SP. Why would they and how could they? The timing of the buybacks is left to the discretion of the broker. And each day we will be told how many shares have been bought and cancelled.

And just to be absolutely clear on the present yield to shareholders on an annualised basis. We have another $100M dividend to be paid in November and we have $200M in share buy backs before 31st December 2022. Buy backs are essentially the same as a dividend but without the tax implications. So $300m/$42507m x 365/199 = 12.94%. And I have assumed that the dividend will not be increased at the half years stage but I think that is extremely likely.

Just what we have been waiting for. I do not see how you can take out $200M of shares (or just under 5% of share capital) in 6 months without forcing up the sp dramatically. The institutions who wanted to bail out have done so. Only about 10% of shares are in private hands and most of those holders will have worked out that the intrinsic value is at least 3 times present market value. Long walk back to sanity begins today.

or pounds

The debt is now trivial whether in dollars of pounds. On the most conservative assumptions it will be paid off by the end of March 2023. And rising costs are not a big factor when you are producing at under $15 a barrel. So I see no problem at all ahead. Reasons to be cheerful: 1. Prospective free cash flow around 50% of market cap for 2023. 2. Capital restructuring next month. 3. Dividend exactly 5% but certain to be substantially increased. 4. Share buy backs to start soon. 5. Crass selling/shorting must end soon. 6. Windfall tax a feather duster if allowances used skilfully. 7. Company responsible on CO2 emissions and working towards being carbon neutral by 2035. 8. Excellent safety record. 9 Excellent M and A record. 10. Tinpam closer and closer. 11. First class board getting on running the company, ignoring noise and fully aware that their primary responsibility is to their shareholders. 12 Weather warm garden lovely birds singing.

Yes in some ways they are a safe haven. Oil locked in the ground is a bit like gold locked in a safe. It cannot be stolen by any one. It belongs to the company and it can choose when to extract it. But Gold does not produce any yield at all. Harbour is 50% per annum. So I kind of prefer Harbour to gold sovereigns. Over the worst perhaps. But who really knows.

925,533,633 shares in circulation x £3.57 x 1.2159 =$4.017bn market cap. Present dividend $200M. Dividend yield $200/4017 = 4.97%. Board said in May that would increase dividend and embark on share buy backs if the price of oil "remained elevated" . It has increased markedly since they said that. This whole pantomime has been about forced selling or selling as a matter of policy at any price by GIC. They have just a few left which they may decide to keep. Never in my life have I seen such crass nonsense. What in Heaven's name are they going to buy instead? Yes you have forced the price down but the rebound will be almighty.

In her day the boys did fight over her. Hence the millions. But no I just can't do it.

Absolutely out of dosh. But highly tempted to approach my dear granny for a loan of the odd million to buy 300,000 more. Only person I know who would have it in her current account and would lend it with a smile. Have to accept a cheque mind. She does not do internet banking and so it could all be too late by next Wednesday. But at 101 gran should be left to lunch and play bridge with the other rich old ladies of Kensington and Chelsea. But this is insane. Mad dog crazy. So mighty tempted to ask the question.

Who knows what this will do now. The market cap is now just $4bn. This is a company that has been paying off $200M in debt a month and could be clear of debt by the year end. The yield is now 5% (exactly). The dividend could be comfortably trebled. Just wild panic.

Neversell I have come up with figures like that before. But I now think they are too optimistic. There was only $160 M of CAPEX in the first quarter. The second quarter will need to be more like $400M to reach $1.3bn a year. Also because of maintenance the production will be below 215,000 a day. Prices of Brent averaged S117 in March so I was expecting a more than $200M reduction in debt for that month. But I think the company may have allowed for the $100M dividend announced on 17th March 2022. In April Brent averaged $104M (well below March) and in May it averaged $113. In June so far we are around $119 average. And then we have Tolmount which of course is a massive plus. In August the Board will say what the figure for debt was on 30th June 2022 and provide a figure for 31st July as well. I would be happy with a reduction of a further S600M to the end of July 2022 - or $150M a month. Debt will then be $1.1Bn which is chicken feed. There is no need for the company to be obsessed with being debt free. The interest rate is under 5% and the dividend payment saved by buying shares is around 4.6% of the amount spent. The cost of servicing a debt of $1.1 bn at 5% is just $55M - less than the value of 3 days production. I would say it is in shareholders' interest to drive out these apparent forced or crazy "sellers at any price" and I think that programme can start whilst continuing to strengthen the balance sheet at a more moderate rate.

The discounted cash flow modelling illustrates the blindingly obvious. But if you look at Simple Wall Streets' analysis they have hugely understated the extent of the under valuation. First, they use a discount rate of 9.6% per annum. In other words a dollar received in June 2023 is worth 9.6% less than a dollar received today. That is far too high. For property valuations it is typically 4.75% per annum. If you use a very high discount rate then, with the effect of compounding, future earnings rapidly reduce in terms of present value. Second they are clearly off with their figures any way. The free cash flow for 2022 is stated as just $1.4 bn. It is going to be more than that - at least $1.7bn. The free cash flow (after discounting at 9.6%) for 2023 is estimated at just $944bn. It is going to be at least double that - and so on. And thirdly the calculations only cover a 10 year period. They are treating HBR as if it were a lease with 10 years to go before the property must be handed back to the landlord. Whereas in fact in 10 years HBR will still be around and the world will still need its products. On the often raised subject as to why seemingly rationale institutions are selling at these crazy low prices. I just do not know. But I am sure they do not have access to any information which we do not have access to. I think they are making a huge mistake which they will regret. August is coming and we will have a very clear picture by the next update. The losses made in just 6 weeks can be reversed in 8 weeks.

poorly timed

Grandma dispatched very happy and so I have a glass (or two) inspired moment to respond to you Rookie. 1. Happy for any one to say what ever they like on this board. I am doing the same. We have zero impact on the market. It is a kind of therapy for me. 2. I am not on a high horse. 3. I have only appeared in the last two months. But did not realise there was some sort of hierarchy based on history or number of posts. (God help us if it is based on number of posts). My appearance coincided with a poorly time decision to load up on HBR. 4. To answer your question about what I expect a buy back to achieve. My answer is a great deal. It would increase earnings per share of remaining shareholders. It would save the company the dividend that would otherwise be paid to those who sell. It would signal to the market that the company thinks the shares are a good investment at the price. It is more tax efficient than paying increased dividends. 5. I am against the windfall tax. But I do not think it will be as bad as the market seems to think. As I say, I await the Finance Bill to be published. 6. I do think this is a smashing company with great potential and I find all this "dog" or " piece of xxxx stuff" tedious and pointless. In fact the purchase of Premier Oil was quite masterly in its timing. Now we latecomers hope to benefit from Linda's brilliance.

Jeff may be learn how to spell yield. You talk about it a lot. I am one of the clowns to whom you refer.

We do not yet have a windfall tax. The draft Finance Bill has not been published yet. The key provisions will be
(a) what counts as a deductible allowance at the super generous rate.
(b) the date of the sunset clause. The latter could be brought forward from the date proposed because a multi- year tax may discourage precisely the investment that the chancellor seeks to encourage. Or it might be phased out between 2023 and 2025.
The more I think about it the less worried I become. Most of Harbour's earnings will not be taxed at all because of all the unused Premier Oil tax losses. And if the new allowances are used skilfully, the investment can be made over the next three years with a view to first oil or first gas being after the sunset clause comes into effect. Horrid last few weeks for all investors. Hugely down myself. But a big fan of Linda Cook and Alexander Krane. Brilliant people getting on with running a company in the interests of shareholders. And Elizabeth Brooks was extremely helpful to me in explaining the reason for the capital restructuring taking place next month. That is all about being able to lawfully increase rewards to shareholders. So no more moaning at the current share price as if it were a misbehaving child. No more screaming for an RNS when the company has nothing of substance to announce. If you think the share price should be higher buy. If you think the company is a "dog" run by incompetent crooks or that the share price is too high then sell. It will not be long before Harbour will be in the market snapping up these cheap shares sold by the frightened and the disillusioned and the lower the price the more shares will be gobbled up to the benefit of those who stayed the course. All in my opinion of course. And now I hear my grandmother (aged today 101!) arriving in some style at my house for her birthday celebrations in the garden. Have a great weekend. Gran and I most certainly will.

Yielding ultimately for shareholders. Either the money will be paid out in dividends or it will be used to buy shares. This will all be fine in the end. All been said before I know. But it will.