Heritage Oil Share Discussion Threads

[mercury123] 06/3/2014 08:55

Isn't this fun - I've been holding since 2010 - and trading quite a bit too and it's good to see patience rewarded. My longest term ones need to see 3.36 to make money but the more recent additions much more than make up for that.

[muscletrade] 06/3/2014 08:31

@nige, As you say 100% return not to be sneezed at and no one can blame you for realising a very good gain, and at least you are still a holder.

My own view is that it is well worth sticking around. If the Pioneer tax holiday status is accurate (and it seems increasingly likely that it is) then the effect is/could be to virtually triple nettback dollars for Hoil not only going forward but also for last year as well.
Put another way this could alternatively be viewed as having the economic effect of tripling HOIL production for last year and forward thru 2017.I must be cautious to not get too carried away with exuberance though
Anyway good luck.

[v11slr] 06/3/2014 08:14

nigelpm - just checked back and I bought some at 1.2844 on 21/06/12. Still got them.

[scrambled eggmann] 06/3/2014 08:11

We could always get a positive abritration result and that would add a few pence on.

This was a no-brainer but took a while for the market to catch on. I sold a third at 210 pence before the tax news and that was a bad decision.

[nigelpm] 06/3/2014 07:59

Amazing how no-one was interested at £1.40 though?

[cumnor] 06/3/2014 07:46

True, NP, but longer term this company, on the basis of its assets and production potential, has a low mrkt cap and could be multiples of its present share price It has just doubled from its lows-that (from the LT perspective) is imo just the beginning. Depends on your trading style and patience. imo

[nigelpm] 06/3/2014 07:30

Took out half my holding yesterday. Nearly 100% gain - not to be sniffed at and getting to the point of pull back territory.

[cumnor] 05/3/2014 21:33

Well, well! That's good news. A few more eyes on us from now.

[chopsy] 05/3/2014 18:23

Then there is png, Tanzania etc...

[rjcdc] 05/3/2014 15:28

Citi has raised its price target to 315p/share (from 165p/share) and also bumped up its earnings estimates but says that after moving strongly on the news, more detail on Heritage's development plans in Nigeria will be needed to send the shares trade higher than its target price.

Roll on the finals then as they should cover more info on the development plans, a recalculated set of earnings and forecast and a potential dividend that could now be paid for from any tax savings, which sound like they could be immense (if true).

Throw in rejoining the ftse 250, further potential Nigerian licenses and dare I say it, anything back from the URA, and we almost have a perfect set up for a re rating way beyond here....

It's getting quite interesting now...

[muscletrade] 05/3/2014 13:31

@duke, many thanks.better n better.

[dukedosh] 05/3/2014 13:15

@MT,
The comments were from JPM and Citi.

[sm001] 05/3/2014 12:57

RJDC and ramellous thank you for your posts.. Per annum?!! Lol that makes a HUGE difference.

[muscletrade] 05/3/2014 12:49

Thanks for that Duke.
Your first para seems to be quoting JPMCazenove, while second is Citi. Could you confirm.

[dukedosh] 05/3/2014 12:25

Heritage Oil - Pioner Tax Status Confirmed

Heritage Oil (LON:HOIL), meanwhile, could see a significant value uplift from tax status change in Nigeria said Citigroup.
Heritage has received confirmation from the country's tax authorities of a change to the tax status of its Nigerian operations.
While Heritage has yet to quantify the impact of this change, the grant of "Pioneer Status" will give Heritage a five-year tax holiday from the marginal petroleum tax rate of 65.75% and delivers a material enhancement in the value of its Nigerian assets, said JPM.
Citi has raised its price target to 315p/share (from 165p/share) and also bumped up its earnings estimates but says that after moving strongly on the news, more detail on Heritage's development plans in Nigeria will be needed to send the shares trade higher than its target price.

[muscletrade] 05/3/2014 10:34

Northland have reiterated their BUY this morning and the share price their old share price target of 238p is "under review".

So I guess this means that they are also trying to assess the impact of tax situation and latest production updates

[rjcdc] 05/3/2014 09:59

Sm001... The two statements are ambiguous indeed. My understanding is that Shells license for 45% of oml 29 is valued at about $1.5 Bn - $2bn, and so the entire license should effectively be worth $4bn ish.

Heritage and it's indigenous partner are bidding for Shells 45% and assuming a 50/50 split then the cost to heritage would be about 750m - $1bn if successful.

Oml 30 is not dissimilar in production or reserves (from memory) which suggest that the $800m paid (for45%) was a bit of a bargain and perhaps should be worth double this.

The tax change is a massive bonus if true... Company making even.

[muscletrade] 05/3/2014 09:37

Please see below link to Nigerian Biz press article. Below that is a short extract from the article that refers to pioneer tax status for companies buying assets from IOC's. It infers that they enjoy a tax free period of 5 years.

If this is applicable to HOIL then the effect is huge.

The HOIL "net back assumptions" for HOIL show Petroleum tax profits as $51.35 per barrel(based on $115 oil). This tax level is roughly twice the net back to HOIL in current assumptions of $26.75.

In simpler terms if HOIL enjoy tax holiday then nett to Hoil increases from $26.75 to $78.1 (based on $115 oil).

Has anyone else done a back of the envelope calculation of possible effects?




"They however advise that any such project in future should not be given more than a five-year tax holiday. For instance, indigenous companies who are acquiring the divested assets from the IOCs are given pioneer status, with a 5-year tax holiday.

Victor Onyenkpa, partner and head, tax, regulatory and people services, KPMG, at a recent discussion had noted that the 5-year tax holiday would help to boost the capacity of the indigenous firms".

[dodge meister] 05/3/2014 08:40

sm001:
hxxp://africaoilgasreport.com/2014/02/farm-in-farm-out/shell-co-look-forward-to-earning-2-5billion-from-nigerian-lease-sale/

[ramellous] 05/3/2014 07:47

sm001, the earnings are per annum?

[sm001] 05/3/2014 01:38

well according to:

hxxp://www.stockchallenge.co.uk/ftse.PHP

we may have made it back into the FTSE 250, which would in itself account for the recent share price strength due to fund managers buying...

please however somebody answer my question stated in 4221/4222

eg: RJCDC.. But anyone welcome!

[muscletrade] 04/3/2014 14:40

Glencore Xstrata Eyes Shell's Nigeria Assets, BHP's Australian Nickel Project

By Alex MacDonald LONDON-- Glencore Xstrata PLC said Tuesday it will look at Royal Dutch Shell PLC's Nigerian oil and BHP Billiton Ltd's Australian nickel assets as part of its opportunistic approach to mergers and acquisitions strategy. Chief Executive Ivan Glasenberg said the commodities titan only purchases assets that meet its criteria for returns on investment. Glencore will look at Shell's Nigeria assets although, "I'm not sure we will get there at the [investment] hurdle rates which we require," he told journalists on a call. A Shell spokesman declined to comment on whether Glencore was in the running for the Nigerian oil assets. Shell had received interest from more than 100 parties for them, he said, and has whittled the pool to 20 bidders. Shell Chief Executive Officer Ben van Beurden, who took the reins Jan. 1, is mapping out a more conservative path for the Anglo-Dutch company after a decade of heavy investment in large, long-term projects and as low natural gas prices in the U.S. are weighing on its earnings.

[fangorn2] 04/3/2014 14:24

Good luck. I sold my Soco fairly recently,albeit a bit lower than the current, around 430-435p and put it into Gulfsands last week as well as into some Blinx. Not so happy about the second trade.....

Am hoping to get back into Soco at some point.