Harbour Energy Share Discussion Threads

[frontdoor bull] 14/1/2018 17:21

Sold out you say?


HA HA HA,
FFS.

[begorrah88] 14/1/2018 17:03

RogKSold out you say?Nobody could have guessed ;-)

[marvin9] 14/1/2018 16:06

Oh yes it is!

[begorrah88] 14/1/2018 14:13

I think Rogk missed the previous boat from the 60's as he has been posting this same nonsense for a while now.

Obviously rankles with him so he has gone into overdrive to try and spread some unfounded negativity.

Not working.

[deanroberthunt] 14/1/2018 13:27

what's TLW's opex per barrel ?

[adg] 14/1/2018 13:06

Rogk
You are making a bit of a windylicket of yourself

[rationaleee] 14/1/2018 12:25

rogk, The key word is 'improving'. No one is worried aboout covenants, as the base case assumed during refinancing was oil price of $55 for 2018 and Catcher on stream. Sounds delusional to fixate on something that isn't there.

If you sold out because of the covenant issue you mentioned then lol. Maybe the refinancing effective date in the summer of 2017 was actually from summer of 2016 or the date from which covenant deferrals started?! Maybe PMO needs to pay the new interest on debt retrospectively for the amount of time the refinancing dragged on?! lol. good luck getting back in or not

[rationaleee] 14/1/2018 12:09

rogk, Was it worth selling right before when the shorting shackles are about to come off, especially after witnessing so many games with share price for so long? Looks pretty obvious, its easier to stick with an investment when you are loosing money than with an investment where you are in profit. When no one is worried about the covenants but you are, that just shows desperation of wanting to getting back in. The proxy rights issue has happened already in Jan 17 when the refinancing terms were out for CBs.

dean- TLW has penciled in $500mn-$600m FCF for this year, all things being equal, no way PMO is going to generate FCF more than TLWs.

[deanroberthunt] 14/1/2018 11:48

and even if they felt the need to do one over 200p, I'd take it up.

[deanroberthunt] 14/1/2018 11:47

I see no needs for a rights when they'll generate between $600-$800m fcf this year...plus they have $200m+ from sales and planning others....

[frontdoor bull] 14/1/2018 11:42

Rogk

What price did you sell at, ??.

[fitton] 14/1/2018 11:11

It a great sign of confidence to invite the cb holders to convert.Shorting the company is not the way forward from here.Catcher has tipped the balance in favour of the company and not the shorters.The oil price has helped enormously and with the extra production the company is finally in a position to start repaying debt.With the debt reducing any shorting strategy is very very risky even if it is used with other financial instruments.Maybe expect short term weakness but shorting the company is pointless.I would have to say another positive step forward by TD and his advisors.If you are not positive about the company after the last 2 years of excellent news flow then stay out and invest in something else.Talk of covenant tests etc in a week when the share price has gone to a 12 month high, is the talk of either someone that has sold out early or a very careful negative person.I hope all holders that have stayed with the company make a lot of money.

[deanroberthunt] 14/1/2018 08:24

this is one of the most highly geared to the POO, so at $70 Brent, it's massively lagging in value even after the rise from 70p to 100p....as I 've said before this could 2-3 bag in very quick order and still not be expensive...

Caveat, Oil has risen hard and fast, and whilst my PMO shares are SIPP'd and I will be holding for at least another 3-4 yrs min, seeing Tolmount, Seal Lion into production, and Zama, should they not sell it.......I'll probably hedge now with a 3BRS ETF....as I can see a pullback on POO, if this happens I'll sell the ETF and pile the profits back into PMO Equity.

target price end 2021: 1200p

[deanroberthunt] 14/1/2018 07:31

so this could rise to around 250-300p a share and be about right as we stand.

[deanroberthunt] 14/1/2018 07:29

I get to a very rough NPV of $1.2 to $1.5bn, using 85kboepd production, and 0.50c/barrel for undeveloped reserves...although my production value was based on Wytch Farm, and the POO is now significantly higher.

[rationaleee] 14/1/2018 01:47

Left the debt component out on purpose to only focus on equity valuation, which is driven by market forces daily, and these market forces also price in debt risks in the equity valuation. Also, debt is relative i.e. at $70 oil price TLW can comfortably service its $3.5bn debt as compared to what PMO ($2.7bn) or ENQ($2bn) could afford at $70 oil price.

[heialex1] 14/1/2018 00:30

Good logic, but you should value the enterprise value of the companies rather than the market cap. EV=market cap + net debt

[rationaleee] 13/1/2018 20:39

IMO the way to look at this whole conversion induced dilution is by comparing the fully diluted market cap of Pmo with the closest peer we have, and assume the market values a mid-cap oil company fairly given where oil prices are. Its important to compare with a peer stock which does not have distorted trading going on in the background as PMO does. This will give us an understanding of how the market is valuing a peer at the current oil prices of c.$70 and how it would value PMO when all the shorting HFs have left and the total shares in issue are c.800mn.

The closest peer that comes to mind is ENQ, not TLW obviously because of the quality of their reserves/assets and margins. PMO and ENQ both operate primarily in the UK so lets assume similar opex, margins, country risk, etc. Production assumed at 85kbd vs 65kbd, which could be evened out by debt of $2.7bn vs $2bn for PMO & ENQ respectively.

So given the current market sentiment and oil price of $70, ENQ is being valued at £470mn for its c.60-65kbd production, $2bn debt and any Kraken specific risks. While PMO is being valued at £501mn @ 525mn shares with the news of conversion out in the market, and if we assume market values a company fairly, the diluted market cap PMO currently has is £760mn @ an assumed c.800mn shares in issue. So at oil prices of $70 the current market value difference between PMO and ENQ is £760mn-£470mn = £290mn as of today.

So for PMO we can assume the additional £290mn attributed to our marketcap post dilution is essentailly valuing the difference between PMO and ENQ, such as higher production of 20kbd, $465mn of additional debt (post conversion and removing $235mn debt), Zama, Tolmount, Sea Lion, Tuna, etc. So I think if PMO share price goes down from the current level of say 95p, this premium of £290mn in our market cap over ENQ, that values everything PMO has that ENQ doesn't, should go down in tandem with oil prices. But if oil prices stay where they are or go up and ENQ valuation goes up with it, the valuation gap between PMO and ENQ will increase a lot more if PMO share price stays flat or goes down due to this dilution priced-in/ not-priced in confusion. i.e PMO gets more undervalued for what it has due to this CB conversion confusion.

This presents a buying opportunity to anyone who does not want to second guess the market. If you think PMO share price will go down even if oil price stays flat or goes up, IMO that will be a brilliant buying opportunity and I would definitely be buying in more, as PMO will be falling behind ENQs fair valuation proxy as described above.

Or we could sell right now and book profits in the hope of buying in cheaper(+ stamp duty payment again grr!) which may or may not happen depending on oil prices. IMO buying back cheaper is more risky right now as you'd have the dillemma of knowing when to buy in as it could keep falling or if you don't buy, it could start rising, especially when we know how fast PMO rises when the tide turns. Based on a lot of PIs experience PMO can let you sell your stock easily but does not allow you to get back in the stock that easily or cheaply when the tide changes. Honestly, too much hassle for a patient investor but obviously not for traders. For traders anything mentioned above is irrelavant and they will obviously do whats best for the short term, as they are used to second guessing the market and speculating rather than investing.

Obviously above mentioned are just my thoughts and could be wrong on the whole thing described above, so DYOR. But I'd be keen to hear what other members on this board think especially Steve, bakedbean, etc. on the above whole dilution aspect? Thanks