Member Info for Soder

Cool. In it to win it :)

The main thing to take away is that they have generated an additional 300m of cash versus their business plan. As such net debt at 2.9bn put us in a very strong position to pick up cheap assets.

BP are back in the market looking for bids for their North Sea assets. I have seen Ithaca and enquest linked alongside serica and tailwind. Our pro forma harbour balance sheet is so strong we are in a better place than any of those to pick these assets up. The North Sea is still a a cash cow with valuations super cheap. Would t mind if we used some cash to pick them up and add even more production.

They selling shearwater and Andrew fields which pmo agreed to pay $625m for last year before falling apart. Imagine if we could pick them up at a discount. $400-500m all funded via cash flow. YES PLEASE.

And now unchanged versus shell down 0.63% so outperforming the peers

We are now down 0.5%. Shell is down 0.58%.

You really think the smart money cares about these results?

Keeping back supplies for own population.

And that there is why, vaccines AND testing infrastructure and capacity will be from U.K. companies going forward. When the chips are down you can’t rely on anyone else as countries will always prioritise their own populations.

Come on the Novacyt.

Honestly I didn’t even know it was results. Why on earth do you care what pmo did last year in a lockdown year with oil at 40 and lower?

This biz is going to be much less volatile going forward given:
- half of it is gas which is a much more contractual market.
- The balance sheet is less than 1.5x levered.
- hedging

My view on hedging....at some point those lost opex bbl come back on the market. An oil price of 60 is great for us as opex per bbl is 15 and will fall. If you can lock in 45 bbl by hedging that is good! Allows us to generate HUGE free cashflow to be used to add more production via M&A, pay dividends, complete existing projects.

If we were hedging at 40 I would be disappointed but if the mkt allows you to hedge in the 60s you should do as much as you can for as long as you can.

Here are the key points for anyone that cares about the future and not the past. I never owned pmo last year and bought into the harbour story and not pmo past.

1. Net debt at close will be 2.9bn. Not 3.2bn as per December guidance. POSITIVE
2. 2021 Production guidance for combined group maintained at 201-220k so 210k midpoint. POSITIVE
3. Opex guidance at 15 bbl maintained. NEUTRAL
4. 2021 Capex slightly up given higher decommissioning costs at PMO. Expect 1050-1150m now. NEUTRAL as funded from higher free cashflow.
5. Premier sneakily reducing its oil price assumptions to 60 from 65 so booking an impairment. This also leads to a 817m tax loss in P&l which the combined entity will be able to use and thus allow chrysaor to offset taxable profits against it for the year. POSITIVE
6. Cather performance back up to speed. POSITIVE
7. Tolmount due online in Q2. POSITIVE

Why do you care what the look backward numbers are for this biz? It won’t exist in 2 weeks and the oil and economic price environment is totally diff from last year.

Who is in this trade for pmo 2020 performance rather than harbour future opportunity set?

I could not give a toss what sp does today. It’s irrelevant.

The rns is quoting only chrysaor hedging. The COMBINED entity already disclosed hedging of 16m bl l oil at 60 (42 percent of total oil production) and 22m boe gas at 43p a therm (58 percent of total gas production)

Those hedges are ALL in my model. Don’t forget half the combined biz is now gas anyway so you dont have pure oil exposure.

My mode runs with those hedges and 65 spot oil and 32 boe spot gas.

You are talking rubbish. There hedging for the COMBINED group was disclosed before. Both volume and price for 21. My model and analysis includes all hedging details for the COMBINED entity. I stand by my analysis.

Not good reading? How? Last year was a write off for the industry. Everyone knows that and that’s why the merger is happening. What were you expecting?

Net debt will be 2.9bn at close so their cf is running 300m ahead of schedule.

Pmo stand-alone is irrelevant. It’s a company that won’t exist at all in 2 weeks. You buy pmo stock for the harbour story.

Gusher...

Imagine I am a banana seller. you are a banana farmer and are due to deliver me 100 bananas on 1 April. There is a liquid market for bananas that allows me to buy and sell freely. If I want to lock in the price for those bananas I will pre sell them on the banana market ahead of you delivering them to me. Ie I will short sell as I do t have them yet, but I know I am getting them.

Results hopefully will get us some forward looking statements for enlarged group. The backward looking pmo data is irrelevant as that biz won’t even exist in 2 weeks.

Entirely backward looking blurb written by a robot quoting meaningless stats about a business that won’t exists on n 2 weeks.

Pmo is dead. Long live harbour.

Melquart are long the debt and part of the debt converts to shares when the deal closes. So by shorting they are essentially just “pre selling” those shares they will be allocated in the debt for equity swap to take/lock-in profits.

Same is true with arcm and white box. Remember that all of this debt traded at meaningful discounts to its face value. Up to 50% originally in 2016 and the last trades late year were at 70-80% of face value. Hence those distressed debt and hedge funds who bought it have already made good money and just locking in pnl now.

Re the analysts commenting on creditor shares. That’s not their job. That will just be a short term market technical they can’t control. An analyst is there to do fundamental, bottom up analysis of the company and not second guess when shareholders may sell.

Forecast for 2022 ebitdax is $2.55bn with FCF of $1.1bn and closing debt of $1.6bn. This is off a $65 bbl oil forecast.

Based on that, back of the fag packet valuation at 5.5x ev ebitda for next year (2022) would be 48p a share (assuming fx 1.39)

First real in depth piece out on harbour. Title is “safe harbour? We think so”

They say could generate $1bn FCF at $65 oil and highlight that dividends likely in 2021 (will be paid in 2022) and acquisitions very likely at attractive valuations. They n fact they think dividends and M&a is probable and possible given fcf.

They say $1bn FCF per year (out to 2025) will drive balance sheet deleveraging to 0.6x by end of 2022. They think net debt will already be below 3bn.

The only down side of a very positive report is the price target of 26p based on a risked NAV at $50 bbl oil for 2021. We already know 50 oil is nonsense for 21 unless we get another crash so the market will ignore that nav.

Just thought that pillar 1 capacity not being available was strange around the time the contract expires and a step change in reported capacity would be due tomorrow n a new roll out.

Maybe I’m reading too much into it but it’s never happened before.

Strangely saying NA since 12 March. Not seen that before.

https://coronavirus.data.gov.uk/details/testing

The new Jv is 60/40.

Tullow own 60 percent WI. If they had to or choose sell that as part of their upcoming refi and that JV bought it it would leave total with 51 percent, eco 15 and Qatar 34.

Is it coincidence that a new Jv and Jv partner will on board and that a future deal with tullow could leave total with 51 percent ie control?