Harbour Energy Share Discussion Threads

[andypop1] 29/4/2020 23:27

Leon,
Is that all you have to offer?
The company is losing cash hand over fist at the current oil and UK gas price.
The business currently needs $35 to break even, fill your boots son!

[andypop1] 29/4/2020 23:16

Crystal,
If the judge actually said that when the placing and rights issue is fully underwritten then ARCM are right to take it to appeal, the market won't decide if the equity raise is fair but instead it will be decided by two brokers should the appeal not be successful and the proposed acquisitions be voted for by the shareholders.
It really is a double edged sword, the question is which edge is sharpest?
Massive dilution or debt renegotiation?

[stansmith3] 29/4/2020 19:57

so its down 70+%, then up 17% and the bulls are rioting? come on leo, i know you know better than that

[leoneobull] 29/4/2020 19:37

Andy posting extensively about impending Armageddon.....I knew I should have topped up!!

[rose_by_another_name] 29/4/2020 15:27

Doesn't seem to have moved the price of the
bond. I hold the bond, not shares.

edit- Spoke too soon, bond on the rise.

[adg] 29/4/2020 15:08

A new deal is on the cards then i expect - this 'double tsunami' may have actually benefited PMO (if they surViVe) but we wont know much detail for a while....

If memory serves me correctly Premier Oils purchase of all of Eon’s North Sea assets was at a time of severe Oil price challenges (was it early 2016 with oil at $30?) - ended up being a masterstroke - plenty of Naysayers about then i think too....

But listening to our incumbent trolling windylickers wtfdik?

[crystball] 29/4/2020 14:50

'In making her decision, Lady Wolffe noted the “overwhelming” creditor support and said it should be left to the market itself to decide whether Premier Oil’s proposals should come to fruition.

She said: “If the equity raise does not generate sufficient new capital, the Acquisitions cannot be funded. The first step is the equity raise. There is no better predictor of the success of the Schemes in the market than the market itself.'

[rose_by_another_name] 29/4/2020 14:48

Hinting that they might not go ahead with
the acquisitions?

[crystball] 29/4/2020 14:33

Good to see that PMO have won the court case. There will be an appeal.

see

[jelenko] 29/4/2020 10:45

We'll see. Only time will tell.

[excellance] 29/4/2020 10:37

Certainly $40+ next year, but I'm thinking average of $30 for 2020.

So at an average of $30 for 2020 is PMO able to survive without begging for charity?

[stansmith3] 29/4/2020 10:33

futures saying brent will break 40 in sep 22....

[jelenko] 29/4/2020 10:22

And oil consumption is starting to increase in Northern Europe apparently. The virus won't last forever. France coming back on May 11th etc. Governments cannot afford the lockdown to last, the real reason why UK went into lockdown was not to protect the population but to prevent the NHS from being overwhelmed, that was the governments only motivation, they don't give a dam about ordinary people they just didn't want the situation where all the previous NHS cuts would bite them in the backside.

A bit off topic, granted but we all know that oil will be back over $40 in several months time and we all know that PMO's net assets are worth substantially more that their current Mkt Cap. Enough said.

[stansmith3] 29/4/2020 10:08

i dont recall seeing any of the realistic merchants saying oil would never recoveri do see lots of posts from group bias bulls or deluded TA experts saying oil shares will go up as quickly as they fellthe issue is will oil recover quick enough for basket casesoil storage is still filling up....

[jelenko] 29/4/2020 09:45

I think most of the doom merchants on here are forgetting the fact that many of the economies around the world rely on a reasonable oil price to survive. Does anyone really think that they will allow the price to be this low for too long.

Supply can always be matched to demand if the suppliers cooperate. (USA declaring UDI when it wants never helps though) Many years ago I was consulting for one of the world's largest Banana suppliers. They were very sensitive to price and were known to ditch whole vessel loads to prevent lower prices and reroute mid journey for a better price.

From an oil perspective it is likely better to get $40 for one barrel than $40 for two. The main producers WILL therefore cut and even stop production until the price recovers.
Don't bet against that is my opinion.

[andypop1] 29/4/2020 00:27

Excellance,
I am well aware of that, demand for air travel will be down due to a number of factors, the most obvious being governments around the World advising against travel while we are battling this virus globally.
The longer term reduction in air travel will be caused by the economic effects of the virus that will hit us all in the pocket, how many companies will go bust globally?
You've seen the US unemployment numbers, are those poor souls likely to go on a road trip?
Those numbers will be echoed around the World despite governments doing their best to protect both companies and workers, BA, Airbus, Virgin Atlantic, Tata, all big employers in the UK and then there are the high street retailers who have been under pressure for a while.
What about the developing economies?

Good luck all.

[excellance] 28/4/2020 23:56

air travel may well be hit very hard by covid 19 for a year or two, so less kerosene demand, but people will go on road trips instead, and in any case oil isn't merely a fuel for planes.

[andypop1] 28/4/2020 23:35

Steve,
ARCM, love them or hate them, have been banging on about the UK gas price to support their case for the proposed acquisition being not in the best interests of all stakeholders and the company's overly optimistic forecasts of cash flows it will bring to the business.
The UK gas price collapsed prior to the lockdown and any indication the global economy would be hit so hard by the China virus, see below.


hxxps://arcm-premieroilscheme.com/premier-oil-becoming-premier-gas-recent-negative-developments-in-the-uk-gas-market-add-to-the-concerns-around-the-proposed-acquisitions/


The price is now below the projection they published.
The company has hedged some Tolmount gas production through 2021 but it is worth considering that in the context of the onerous terms attached to the project financing partners.

If anybody was in any doubt that oil consumption is staying lower for longer they only need to read IAG’s statement regarding redundancies and forecasts for air travel to return to 2019 levels to get a reality check.

[excellance] 28/4/2020 21:44

presumably, they will cut operations to the bone. They have some production hedged which will offer some protection for a while...

they have debt repayments to manage and general operating capital to maintain, so its a horrible juggling act, and with oil price the probably staying below $30 for several months, how long have they got before they have to get the begging bowl out?

will they sell assets?

will they get taken over?

only bought 25,000 on a speculative basis, i was looking at these a couple of years ago when they were developing their catcher north sea field, but decided against and the share price got away...reading like mad now cos the assets are all over the shop.

debt of about $2 billion, half a billion cash available, costs per barrel produced were as low as $17 only a couple of years ago...

Finance

Premier has hedged 37 per cent of its 2020 first half oil entitlement volumes at US$64/bbl, 40 per cent of its UK gas volumes at 56 pence/therm and 46 per cent of its Indonesian gas entitlement volumes at US$382/te. The Group’s complete hedging schedule is set out at the end of this release.

Full year 2019 field operating costs are estimated to be below full year guidance of US$20/boe at US$18/boe, of which US$11/boe relates to field opex and US$7/boe to FPSO lease costs across the Group. 2020 operating costs are forecast to be US$21/boe, of which US$15/boe relates to field opex and US$6/boe to FPSO lease costs.
Development, exploration and abandonment expenditure for the full year 2019 is estimated at around US$300 million, below original guidance of US$340 million, due to the release of contingency spend related to the BIG-P drilling programme, the Tolmount project tracking below budget and some deferral of spend into 2020.

Total 2020 production and development capex is expected to be US$320 million, principally relating to drilling at Tolmount, Solan and Catcher. In addition, Premier expects to spend US$90 million on exploration and appraisal and US$30 million on abandonment (pre-tax relief).

Premier continues to benefit from its substantial UK corporation tax loss and allowance position with estimated losses and allowances of US$4.2 billion carried forward at 31 December 2019.

Premier reduced net debt by over US$330 million during the period from US$2.33 billion at the end of 2018 to US$1.99 billion as at the end of 2019. Estimated 2019 year-end leverage ratio (covenant net debt / EBITDA) is 2.3x against a covenant of 3.0x.

Hedging schedules

Oil


Swaps/forward
2020 1H

2020 2H

Volume (mmbbls)

3.32

1.23

% of forecast ent. production

37

14

Average price ($/bbl)

64

63

[stansmith3] 28/4/2020 21:10

IF they need more cash?

[excellance] 28/4/2020 20:45

it is a sound investment with oil at $65, but what about $40 or $20 as we have now?

obviously the finances will be stretched, and action will have to be taken regarding cutting costs, but essentially they are awaiting the price of oil recovering, but will that take six months or 18 months, and how long will the cash last?

what if they need more cash, what restrictive covenants come into play?

[stansmith3] 28/4/2020 20:02

well good luck with your puntat least you are not calling pmo a sound investment as onedb1 and adg have been doing at much higher prices

[excellance] 28/4/2020 18:37

whan i say short lived i mean 3 to six months, before a slow recovery is evident.

yes, storage is at 85%+, and demand is way lower than supply, but as soon as lockdown ends the roads will be full all across the world, and its already started.

so ive taken a small punt ahead of the curve. if the share price drops ill probably add.

the biggest question is that of cash for operational needs. do they have enough tp last six months or more?