Member Info for sittingduck11

Hi y11-shx.... why are you wasting your time on here? You're probably a multi millionaire with such reliable stocks and shares foresight.

As i'm often reminded, no one rings a bell when we are at the bottom (or top), but we have a range for buying, and we've been in it for months. 2025 has i believe been a gift for us, incredible really just how cheap Harbour has been this year. Incredible.

And while there is Trump and tax and recessions and whatever, plenty of things to forge negative sentiment into believing it will never go up and only go lower, eventually the value WILL be recognised by the market. I don't care that i'm down slightly, i'm just a touch frustrated I couldn't by more sub 200p, so if we go back there i am buying more.

On another note. The charts.

Look at the Harbour chart right now. Big green weekly candles. So bullish. As long as we can push on and negate that potential H&S pattern, the chart looks so good. Been a looooong time since we've said that.

Just need some follow through next week back up to 230p and we're cooking on gas (and oil).

LOL y11-shx getting pelters for selling haha.

I must admit though y11-shx i think your mad with a 209p average. But if your timing is good you could make a pretty penny. Personally at 209p i don't see the point, you have (or had) a decent holding, (about similar to what i'm holding), at a bargain price (my average is around 250p despite me hoovering up as many as possible sub 200p, anyway i digress), granted they could go lower, but also we may not see 209p for years to come.

Harbour is such a bargain. I know that because the UK stock analysis i do in my day job i'm yet to see anything as compelling. Not AutoTrader, Not Balfour Beatty, not anything.

Watch us sell off by lunch. Classic Harbour.

The dividend seems high because the share price is low - Captain obvious, i know.

I agree, typically a high dividend is a red flag, but in Harbours case, when you look under the bonnet, it's modest. As Sek said, the dividend is comfortably covered by cashflow, more than twice over, and at these oil prices. They could afford to jack it up further and still wouldn't be in the red zone.

I suppose its one of the many reasons why we are all scratching our heads over the share price. But sooner or later there will be a reversion to the mean for oil and Harbour.

There*

I do agree with you though, but its because of the hedges Harbour can maintain dividends, buybacks etc. When oil prices go mad again (which they will sooner or later), we may not make quite as much but it won't matter too much as sentiment will carry the day. Last time oil hit $100 we were over 500p a share and that was when Harbour was half the size. So many catalysts to the upside, the hedges are their to protects us all in the meantime.

Then its just as well you don't run a mid cap oil and gas company Danny boy.

Is there any investment out there currently as compelling as oil and gas? A sector that is hated, underinvested and so darn cheap. Harbour and co are getting walloped, but the businesses are generating healthy free cashflows, paying excellent dividends, buying back shares and paying down debt. Granted the EPL is a significant drag, but for Harbour it's less significant following the WD deal. More and more recognised veteran investors like Rick Rule, Peter Schiff etc are pointing to the ridiculous valuations in the sector, even citing Exxon as 50% below real value at current oil prices.

Not surprisingly oil is heading into the 50s, and at times of capitulation, which i believe we are approaching, it could overshoot to the downside. But it's only after the fact when you look back at the price chart and say, "that's when i should have been buying" pointing at oil/harbour at lows, problem is when you're in that moment, it NEVER feels that way.

The numbers say we are right about Harbour.

Peter Lynch - ""The most important organ in investing is not the brain, it's the stomach."

Have a good weekend all.

Anyhow.... up the Harbour.

There is nearly $8trn in money markets waiting to enter, presumably. And the governments will always slash rates and print money as a matter of course. However, these markets are so overdone. Everyone is in. $19bn in crypto accounts got wiped out on Friday night. Buffet has been waiting months for a pull back. The un inversion of the yield curve is all but forgotten. Recent insider selling and bankruptcies in the private credit market have been tossed aside.

Markets could easily keep storming higher, but the cracks are beginning to show.

A healthy pullback should be welcomed at this stage.

Sekforde is just laying out the numbers, facts, information that on the whole is not subjective. The price is the price, moves around with sentiment, which is all over the place/in the gutter for energy (a very good sign). In the current climate, a healthy business is all we can hope for, for now, forget the price.

And... IMO things are going to get very messy in the coming days/weeks in markets, what we saw on Sunday night will not pass without repercussions. Crypto market was exposed. Rigetti, a company that has annual revenue of around $7m has a market cap of $17bn! There is sooo much leverage, folly, speculation and retail participation in these markets. That needs to be cleansed. Energy will take a beating with everything else. But nowhere near as severe.

Then again... I could be wrong.

Well the good news is the gap has closed on WTI and is not too far off closing on Brent. The bad news is it needs to close below both at the end of the month. A visit into the 50s looks likely.

Or another thing BASF might do is buy the company. The cash element they received just over a year ago is more than enough to buy the 53.5% they do not own at current prices. The net effect would be is they would acquire the Wintershall which they used to own for the cash already received plus the old Harbour for zero. And that is after receiving a couple of juicy dividends and interest on the money they received and of course about $15m in share sales.

Why didn't we consider this. You're in my head with that.

Scenario modelling: $100 oil

Let me outline a rough scenario and then estimate a fair share price under it. The numbers are illustrative.

Assumptions under $100 oil

Suppose Harbour can sell its barrels at $100 (or that the average realized price, net of hedging, is somewhat lower, say $90–95 after hedging and transport)

Production: assume it maintains stable or modestly growing output (say ~ 450,000 boe/day, consistent with post‑Wintershall scale)

Operating costs + royalties: let’s assume their full cost per barrel (opex + royalties + depreciation) is, say, $35–$45/boe (these are guesses)

Taxes / windfall levy: assume a “normal” tax burden plus windfall tax. Suppose combined effective tax and levies take ~50–60 % of incremental profits at $100 oil (in UK / North Sea that high)

CapEx & other expenditures: assume they must invest to maintain/replace decline, so a nontrivial portion of cash flow is used for capex

Discount rate / discount to equity: assume a discount rate (cost of equity or WACC) in the range 8–12 %

We’ll run a simple “incremental cash flow” approach: compute additional cash flows under $100 vs baseline, discount them, and see how much value is added to the current base.

Simplified incremental value estimate (rough)

Incremental revenue per boe

If average cost (all‑in) is $40, then incremental margin per boe = $100 – $40 = $60

After tax margin

If 55 % of that margin is taken in taxes/levies → net margin = $60 × (1 – 0.55) = $27

Volumes

Suppose 450,000 boe/day → annual = 450,000 × 365 = 164,250,000 boe

Incremental net cash flow

164.25 million × $27 = $4,435 million (~$4.435 billion) in incremental free cash flow attributable to $100 oil scenario

Discounting / capitalizing

If you treat that as a perpetuity or over a finite horizon, use a discount rate. For simplicity, assume it’s sustainable and treat it as a perpetual incremental cash flow. At discount rate 10 %, present value = 4,435 ÷ 0.10 = $44,350 million (USD)

Convert to GBP & per share

Assume USD/GBP ~ 1.25 (i.e. $1 = £0.80) → that PV in GBP = £35,480 million

Add that incremental value to current base valuation (say market cap ~£3,600 million) → total ~ £39,080 million

Shares outstanding ~ 1.67 billion shares (per earlier)

Value per share = £39,080 million / 1,670 million = ~ £23.4 per share

Discount / risk adjustment

That is a very “optimistic” base. You might want to discount for risk, growth uncertainty, non‑sustainability, eventual reversion to lower oil, etc. Suppose you apply a discount or knock‑down factor of 50 %, then fair = ~£11.7 per share

So under this illustrative model, with favourable assumptions, fair value might lie in something like £10–£25 per share depending on how aggressively you discount risk, tax, capital needs, and whether $100 oil is sustained.

Bit of fun with ChatGPT. In summary -

ChatGPT : Questions - give me a percentage on the chances oil prices will be above 100% within 5 years.

Quick Estimate: 70–80% probability

There is a high likelihood (roughly 70–80%) that oil prices (Brent or WTI) will exceed $100 at some point in the next 5 years.

Here’s how that estimate breaks down:

1. History supports it

2. Geopolitical risk premium

3. Underinvestment in upstream production

4. Inflation and dollar weakness

Why it might not happen (20–30% chance it doesn’t)

Global recession risk:

Clean energy transition

Strategic supply increases:

Regulatory caps / subsidies / taxes:

Final call: Estimated probability oil exceeds $100 within 5 years

Price Level Estimated Probability

> $100/barrel 70–80%

> $120/barrel 40–50%

> $150/barrel 10–20%

How many more years is that fallacy going to be flogged for?

What makes you say its a fallacy?

Oil was above $100 in 08, 11, 12, 13, 14, 22...... and now inflation is increasing, metals prices are all at all time highs (mining companies are having a field day), oil investments CAPEX is at lows, global oil demand is increasing. I could go on.

The facts speak for themselves.

"We are sitting on $2.7bn of cash"

I agree, they should really do something with this cash, and if BASF has no interest in selling at these levels, i'd be fully in favour of another albeit smaller acquisition. Why not? Oil is suppressed right now, but eventually it will swing back, and for once HBR are in a position (somewhat) to use their new found strength to pick off a smaller producer, adding more production and reserves. Just a thought.

Gaps on the monthly not filled yet.

WTI - $60.40

Brent - $62.65

They might not but it would be the 1st time ever.

Look at the monthly copper chart. That is one of the most bullish set-ups i've ever seen.

Gold, Silver, Copper.

Oil.... tick tock

Don't sweat it chaps... When oil eventually breaks out of this GINORMOUS pattern, and it might go lower in the meantime, 300p a share will be a long way down.

Its just a matter of time at this point.

Oil price target $175