Harbour Energy Share Discussion Threads

[bomfin] 05/10/2021 22:43

Andypop. You are probably right although I thought some senior notes can be converted to shares.

[sbb1x] 05/10/2021 21:02

#API:#Crude +0.951M#Gas +3.682M#Distillate +0.345M #Cushing +1.999M#OOTT $CL_F #OILH/T @BroadStreetOil

[andypop1] 05/10/2021 20:41

bomfin5 Oct '21 - 07:18 - 751 of 767
0 0 0
andypop1. Personally, I think the Senior notes are about letting their people in at good prices before the bonanza. Just my opinion.

Bom,
I don't understand that statement, the notes will be at a fixed rate over the term so what bonanza are they letting their people in before?

Bounty,
Your point about potential rising interest rates is one I hadn't considered, the notes will be fixed but the Junior facility is not, it's LIBOR plus.

Good luck.

[andypop1] 05/10/2021 20:13

Surf,
To me the company is sending the wrong message to potential investors with the announcement yesterday.
PMO tried kicking the proverbial can down the road and it was their undoing, to the sceptics it looks like Harbour are doing the same rather than paying $50m down each six months from June next year.
The market reacted negatively to the news, if it wasn't for the oil price yesterday and today who knows where the share price would be?
Imagine if yesterday's RNS said due to higher than expected commodity prices in the last quarter Harbour is paying the $50m due on the Junior facility in June next year early…...?
Since the takeover there seems to be no confidence in the company, add to that the creditor and legacy shares and you can see why this is sat at 18.5p in old money.

Good luck.

[bomfin] 05/10/2021 15:51

Or perhaps it would be embarrassing to have the former Shell assets making them a fortune while Shell are still lending them money. Smirk.

[andypop1] 05/10/2021 14:34

Sold out.

Surf I'll answer later.

Good luck

[surfit] 05/10/2021 11:28

Hey Andypop, have you had any further musings on why exiting from Shell debt?
Could it be just locating another line of credit having not being able to extend, plus picking up a further 100mil?
As bounty considers it would be better to reduce that debt against potential OnG price retractment.
But maybe we are thinking like Brits (older) too much (dislike of debt) they are USA in thought: EIG may like to take it on for the right returns and double their returns (share holder and further investor) if they have good confidence in the medium term with OnG prices?
I can't seem them (famous last words I.e. ARCM/PMO) letting the debt into the wrong hands but...well the US has demonstrated it can be loose with financial regulations at times.
Will not hold you to your thoughts just intresting to speculate and you were bang in with PMO.
Rgds Sft

[bomfin] 05/10/2021 11:27

Thanks lonrho. I think we are heading for power cuts. Didn`t want to say it but that`s what I`m thinking.

[bountyhunter] 05/10/2021 11:18

yes

gas prices are going crazy today, are we heading for gas cuts?

is it even safe to have a lower pressure in the network?

[lonrho] 05/10/2021 11:07

Working from home.

[bomfin] 05/10/2021 10:43

No, Perhaps very little gas sold to grid from Wressle but that will take time. Resolution discovery is said to have nearly 40 million boe (gas) Egdon 30% Shell their partner.

[bountyhunter] 05/10/2021 10:15

about but wfh
Not looked at Eldon, do they produce gas?

[bomfin] 05/10/2021 09:25

bh, If you are about? Thoughts on Egdon and the Endeavour and Resolution discoveries and the Shell farm in? I`ll look on Egdon thread for any answer.

[catsick] 05/10/2021 08:33

The uk gas futures for dec 2021 are now at 276 which is 217 usd per boe crazy, they need to get tolmont flowing asap it's basically 5m usd a day of free money to get the taps turned on

[bomfin] 05/10/2021 07:50

Yes bh, Nothing is a definite. Although I reckon they have already paid 2nd half Capex from cash flow from July, August, September production. That 2nd half capex should also increase production. At current gas prices and production they look set to pay off £500 million to £1 billion of debt during next 3 months provided no production outages. I think we can safely predict that it will get colder. Compared to Serica they are diversified over many assets but the hedges pretty much account for that advantage and if there is a shut in they are quite siginifcantly worse off. imho dyor

[bountyhunter] 05/10/2021 07:30

Thanks bomfin. Servicing the not insignificant debt longer term in a rising interest rate environment is my main concern if energy prices drop back which they will, it's just a question to what level and when.

[bomfin] 05/10/2021 06:31

They also brought their Capital Markets presentation forward to 9th December from February. I think they are going to buy something but the price explosion on gas will make what would perhaps have been a significant deal to the balance sheet look easy. For example, If they get Tolmount on at anything near current gas prices they get payout on a very long drawn out and expensive project quickly. Just a few thoughts. DYOR

[bomfin] 05/10/2021 06:25

Re debt reduction. We know that from 1st April to 30th June this year they reduced debt by $300 million with lower production because of maintenance on many of their assets and lower prices.

[bomfin] 05/10/2021 06:18

andypop1. Personally, I think the Senior notes are about letting their people in at good prices before the bonanza. Just my opinion.

[catsick] 05/10/2021 05:48

The key thing that the market does not really seem to appreciate is the heavy gas mix that hbr now have which can now be priced in line with seaborne LNG but with none of the massive costs, as European gas production falls away and LNG becomes the marginal supply the gas prices going forward will all be much higher than the oil equivalent as opposed to the historic huge discount, the hedges will roll of and there will be a bonanza....

[pdosullivan] 04/10/2021 23:37

Thank you!

[andypop1] 04/10/2021 23:17

BOM,
Those numbers look impressive, so why is the company looking to refinance the $400m Shell Junior debt facility before the debt element becomes repayable from June next year?
Good luck.

[bomfin] 04/10/2021 21:54

bh, the hedged prices are in the recent half year results presentation. The 70,000 hedged gas clears £1 million pounds a day. 30,000 unhedged gas is clearing £4 million a day at current prices. the 50,000 hedged oil is clearing £1.5 million a day and the 50,000 unhedged oil is clearing about £2.25 million a day at current prices. They have Tolmount to come and an active infill and development well drilling programme at their hubs. They could be smashing debt very quickly at this rate. The risk of course is that a production outage where gas production falls under 70,000 boepd sees them having to buy gas at market prices. If they get through the next few months at 210,000 boepd they are mighty cheap.They can earn £7 billion profit in the uk before they have to pay tax. My understanding of what the CEO said in the presentation. imho dyor

[andypop1] 04/10/2021 21:52

PD,
The junior facility of $400 million carries interest at six-month USD LIBOR plus a margin of 5.25 percent, rising to a margin of 5.5 percent from November 2025, and is repayable in semi-annual instalments between 30 June 2022 and 30 June 2026.