Member Info for sittingduck11

Spawny.... come on, lol. You must be on the wind up?

Harbour had 0 debt. Now they have acquired a company twice their size at least, so of course they will have sizable debt. But you knew that before the deal went through. So why bother buying if that's an issue?

And remember when Harbour was formed. The purchase of Premier Oil put the company $2.7bn in debt, for a much smaller company in a much more volatile period. And they paid it down to zero in just over two years and positioned themselves to make the acquisition.

There is always risk. And it might all go pear shaped. But history tells us this company knows what they are doing. Let them get on with it.

If you plan on jumping overboard at the first sign of trouble that's one thing, but you seem to already be in the water before trouble has even appeared.

I'm never surprised by price movements. I was expecting a jump after the deal closed, as was everyone i think, but for the market to do the opposite of what the majority expects is not a surprise.

If it keeps falling, I'll keep buying.

It's an excellent business.

"The most important organ in investing is not the brain, its the stomach."

I'm not sure that's a sensible strategy. Fair enough if the fundamentals change or you notice a red flag in the earnings, but selling because the share price goes down. That sounds a bit barmy to me. Its an oil and gas company, this is the game you're in. Volatility. You'd be better off in bonds IMO.

A bit of perspective. Oil is down about 22% from its highs in 2024. Harbour is down about 19% from highs in 24, BP down 25%.

Take a step back, think about the business you own.

Warren Buffett is down on OXY, I wonder if he is selling because the share price has gone down.

But hey, its your call, your money.

Why would you sell? What's changed? Except from the price.

Perhaps there is something under the surface we have missed or are unaware of.

As far as I can tell, the value has gone up while the price has gone down.

Https://www.harbourenergy.com/media/osrhxiso/harbour-energy-plc-completion-of-acquisition-investor-presentation-030924.pdf

It shows the gold to oil ratio is over 30 AKA 30 barrels of oil buys one ounce of gold.

It has only been above 30 a handful of times since 1946 and on nearly every occasion the oil price has at least doubled following that.

Still - just an observation. Gold may sell off etc, who knows.

Apologies - wrong chart.

This one - https://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart

An interesting chart.

https://www.macrotrends.net/1369/crude-oil-price-history-chart

Get out my head Nitro. I told myself I wouldn't buy anymore.

Harbour sub £3 is like someone handing out gold bars.... (I wish anyway).

A market crash after the WD deal completes? Surely we wouldn't get that lucky.

I watched an interview on a German channel (which I think you may have posted the link on here) discussing the deal.

It was a while ago but i'm pretty sure the interviewer asked how Harbour effectively "a nobody" secured the deal. The guy said Harbour overpaid. Which would make sense, its the only way Harbour could muscle in on the action.

Hi Nss

I agree, there is probably all sorts of shenanigans we are not aware of. And it could all fall through and we are back to square one (ish).

And if that does happen, its a set back. But the company will still be in a strong financial position and the main problem will be finding the right acquisition targets before Harbours oil reserves run dry.

But hey, I'm choosing to be optimistic. There are plenty of things that could go wrong.

We are relying on human beings after all. And we are such a wretched bunch.

I understand why investors compare Harbour to Premier, but to me it makes no sense to do so.

Harbour swallowed up Premiers assets and their debt. The debt is gone. Premier was a stepping stone for Harbour. That's it.

Between 2015 and 2019 for example Premier produced between 50K - 80K barrels per day. Half of Harbours current production in a bad year.

Premiers debt was always between $2bn $3bn in that period. Premier were always scrambling to refinance debt at the expense of shareholders. Harbour aggressively pays down debt until it's gone, protecting shareholders.

Dividends were slim to non existent for Premier shareholders and buy backs were inconceivable. Harbour pays a strong dividend that has risen each year and one that is comfortably covered by free cash flow. Harbour aggressively bought back shares only stopping to allocate the funds to acquisitions. Acquisitions Harbour say are still on the cards.

IMHO once this acquisition goes through, the Premier comparison can be shelved for good.

That's understandable. But Premier Oil was nothing like Harbour Energy. They are chalk and cheese.

Lina Cook said in the recent earnings call. Something along the lines of - eight years ago this company hadn't produced one barrel of oil, soon it will produce 500K barrels.

Incredible journey.

Not really. Harbour is a great business. It's frustrating the price isn't moving higher to reflect that, but ultimately - when you look under the bonnet, everything looks excellent.

Https://www.bloomberg.com/news/articles/2024-08-06/slim-buys-the-dip-to-boost-stakes-in-us-oil-firms-pbf-talos?embedded-checkout=true

3. Recommence share buybacks

Q. Why does a company's share price go up?

A. The company's earnings go up.

Q. Will Harbour Energy's earnings go up following the acquisition?

A. Yes.

Ultimately there are a number of variables to consider like the price of oil, management, debt. But its all something this young company has dealt with before.

IMO its a matter of time.

Another observation -

Michael Burry - the "big short" guy, recently added BP to his portfolio at Scion Asset Management and increased stake in Laredo Petroleum. 6.2% and 6% respectively.

https://stockcircle.com/portfolio/michael-burry