Member Info for Stevo12

Soders

Never ceases to amaze me how lazy and uniformed some of the analysts can be. The profitability and cash flow, together with market comparable EV/ EBITDA, are all relatively easy to calculate - particularly with level of oil and gas price hedging. I concur with your analysis which should eventually lead to a 40p share price minimum at today’s oil and gas prices.

However there are still a few boxes to tick before the share price achieves its value. Most substantially, dividends announced, half year results published, FTSE100 entry confirmed and, most importantly, shareholder base stabilised. I know other have a different view, but I cannot see share price sustainably rising until creditor shares have flushed through.

Possibly or possibly not. MM may be breaking creditor share sales into bite size chunks of 100,000 shares.

It has been a few years since I had to complete a TR1 but it used to be if shareholding exceeds 3%.

If this is current threshold then none of the creditors will need to register their interest as a major holding (Harbour confirmed that none of the creditors are subject to lock in restriction applicable to those holding more than 2.7% of shares)

Pearls

Agree that global pick up should be positive for PO. We just need to get planes flying again. It will come.

I know we have a different views re the distressed debt funds. My belief is they will want to be out before the lock ins start to expire in Sept. They bought the debt at 30-40p in the £1 and even at 25p per share they will have tripled their money. They are generally not interest in dividends and their whole raisin d’etre is to find the next distressed debt to buy and screw over the shareholders. They will not want their capital tied up in harbour.

Let’s compare notes in a couple of months time and see what has happened. I think we both agree on the end destination in terms of value. However I think there will be a number of ups and downs driven by creditors selling shares into rises (Harbour CEO confirmed that creditor share sales were distorting price on Thursday)in webcast), but equally I do not see it going below current 20p.

Great entry point whether you are a reader or LTH

Pearls

Are you still of the opinion that the distressed debt funds will become long term equity holders of Harbour shares and as a result creditors shares will not not be sold into every price rise?

If you are right then the share price should increase in a fairly straight from here. If you are not, the share price will be like a lifeboat on a stormy sea, constantly testing and retreating between 30p and 20p until the creditor selling storm has past.

Hopefully this share will be a safe Harbour but I have got my weather gear on just in case. However, I am confident whether rough or calm seas this is a very robust boat.

Fully agree Space H. Costs plus interest should be €30m+ and the litigation funders will take 50% of that. Accordingly they will more than cover legal costs and generate a decent return. Any amount of compensation for lost profit would be icing on the cake.

The principles of this Claim looks pretty clear cut. There will be a big debate on quantum of both costs incurred and lost profits and this is possibly where the arbitrators are spending their time

Ultimately the funders would not have taken on the case unless reasonably confident of recovery of costs at a minimum. Unfortunately an award of costs plus interest (say €15m to RKH) is not going to really help RKH if Harbour drop Sealion. It will keep Sam and the Board well fed for 2-3 more years while they look for another partner.

I meant to add that HE have committed to spending £1b a year on North Sea to maintain approx 200k bpd. There ambition is to grow another hub with 100k bpd potential. I am not sure Mexico is capable of becoming a 100k hub with current government. The webcast intimated there was a number of acquisition opportunities which they would be running the ruler over and comparing to Zama and Sealion. FIG need to make Sealion as a attractive as possible through an even more favourable tax regime.

There are lower risk Organic opportunities with the portfolio -Talmount will add 25K this year and has lots of near field opportunities. Tuna is progressing nicely.

In the webcast HE also referred to inorganic opportunities to acquire reserves and production through M&A. This has been their preference in the past, namely to buy producing assets generating immediate cash flow as opposed to investing in multi-year development projects.

It all comes down to economics and risk adjusted return on capital, if they can purchase producing assets at a comparable price to developing new fields, they will go down the inorganic route. I hope that with the rise in oil price, producing assets and developed reserves are becoming more expensive.

Just noticed that Captain Kirk has 240 million harbour shares and Captain Cook 38 million. That is a very nice alignment of interest with us shareholders.

Ovets

Solly for my not very good English. I had very extreme dyslexia as a child and my teachers told me I would never be any good at Poetry. But I showed them - I made two lovely clay pots and a vase.

Ps Free is not an abbreviation

What other choice to FIG have. There has been no other interests expressed and PMO had to give away 30% of Sealion for free to get them interested. FIG have rolled over other licences with no prospect of development.

Moggers

The whole purpose of the intra EU challenge to the ECT arbitration process is that companies from within the EU can not use ICSID arbitration to seek redress from an EU member state and that any claims should be heard in the courts of the defending member state. This was the basis of the challenge by the Italian state to have the case dismissed. Go and take a look at the judgment issued by the arbitration panel which rejected the Italian states application to have the case dismissed. As you will see the request was for the claim to be heard in the Italian courts as the contention was that ICSID did not have jurisdiction over intra EU claims.

There is no real risk that the case will not be concluded by ICSID. The issue is more around its success and quantum of settlement. If we are only compensated for costs incurred and interest (which the Italian are claiming have been overstated) and not lost profits, it is not going to make much of a difference.

Pearls

Nothing to do with Harbour. This is purely the incompetence of a number of retail platforms. Some platforms such as Halifax were working perfectly well from the 8 am bell. I bought a parcel of shares through a broker and trade went through at 8.02. Unfortunately could not open a position on IG until we’ll after 9am.

I don’t think there is a conspiracy here or all platforms would have been blocked. Just pure incompetence from majorn platform operators.

Phew that was one interesting day. What are my takeaways from today:

1. Listening to the Harbour webcast, it has confirmed they are a disciplined team and focussed on value creation for themselves, EIG and also for us shareholders - interests are well aligned. Also the analysts who asked the questions are total butt suckers.

2. Dividend is coming but don’t get to excited with initial amount - I was expecting 5% yield but might be closer to 3%

3. They have significantly derisked 2021 and 2022 though hedges which is giving them a $25 pb free cash flow or $1.8b per year

4. Management acknowledged that creditor share sales impacted today’s share price. The good news is that there have been large on and off market transactions today. GS have accumulated 1.1b harbour shares today (principally off market) and 100m were traded on market. That is a third of the 3 billion creditor overhang cleared in a day - great news.

5. Relatively low finance costs at sub 5% with investment grade prospects, which will bring rate down further. No short term maturity issues.

6, shorts are closing as expected with creditor shares being handed back to original share lenders.

7. IG, II, HL platforms are slow and put PIs at a real disadvantage.

Overall pretty happy with today. Confident in the medium term value of my long term holding and I have been able to open a nice trading position at bargain prices.

As previously discussed the shorts are primarily pre-selling of creditor shares and will close by using some of the creditor shares received today.

Firstly there is already precedent re Intra-EU disputes and this was tested several months ago when the italian’s sought to move the case to the Italian courts - this was firmly rejected. Secondly it will take years for the EU court of Justice to decide on whether ECT should apply to Intra EU disputes and thirdly and most importantly, the UK is not in the EU and hasn’t been for 15 months.

The risk with this case is that we get costs plus interest reimbursed but not the loss of future profit.

Correct over $1b spent on Sealion to date and yet Navitas have been given 30% of Sealion and other FI prospects for free. This was a consequence of very little interest from anyone else and Premier need a partner to share development costs.

If Harbour decides to run with Sealion they do not need Navitas. I thought it was interested that Harbour confirmed that Zama would likely receive FID this year and yet no indication on Sealion timing, other than not this year. Sealion is more advanced than Zama with FEED fully completed and now Talos cannot agree on unitisation with Pemex. I understand they want to do their DD but let’s be honest they have been in charge for last few months and they seem to have arrived at a decision to FID Zama very quickly.

I am worried that the mood music does not sound good.

Shaf5

The lock in restriction of 3 months only applies if you hold over 500 million shares. I don't think any of the creditors are above that level - ARCM would be closest

Value of warrants negligible compared to 3 billion creditor shares they are holding and will sell over next few weeks. The warrants also have a relatively long exercise period and once creditor share overhang is cleared, the price will rise and the warrants should be above water by Q3.

Good volume of trading today with over 50m+ shares traded so far today. Just another 3 billion to go to flush out the remaining PMO distressed funds creditor shares. At approx 100m shares per day we should have removed the creditor overhand in 6-8 weeks.

This is going to be a painful process a bit like passing a kidney stone.

Rocky

Lots of money to be made here on trading pmo over next couple of months.

My plan is to go long at 20p and close at 28p and then short at 30p and close at 22p. I think we will see shares move up and down in this range several times over next 2-3 months. I could not get in below 20p this morning due to IG incompetence and have opened a long at 21p. Will increase long if price drops back down to 20p next week.

Based on your current position you should be able to earn £10k on each upwards cycle. If you also trade the down cycle as well you should be able to repeat this trade at least 10 times over next few months.

Good luck.