Harbour Energy Share Discussion Threads

[fireplace22] 25/11/2018 08:19

ROBZIM, Apparently they expect the permian to increase its output by 1.5M bbls/d every year for 7 years thats an extra 10M bbl/d by 2025. By 2040 (peak oil) the permian will represent 75% of world output growth. Sounds like the RoW is just relacing depleted reserves and little else?

[robizm] 25/11/2018 08:10

E O G trade on something like 60 x earnings and they are described as a well run company and good long term hold in the USA. Pmo will have to sell Zama to get the debt down faster

[robizm] 25/11/2018 08:06

The more opec cut the more shale will grow. I read up on a few shale oil companies such as E O G resources who are worth $58 billion dollars and pump 415000 barrels a day. With oil at $70 they had their best quarter ever with 1/2 billion free cash flow after paying a tiny dividend and a small amount off the 6 billion debt. They have 9500 drilling slots and 13 billion barrels in reserves and even if oil goes to $30 dollars they will carry on raising production.

Unless demand carries on growing these usa producers will drive the price down as they have to drill to survive.

[dealer1972] 24/11/2018 22:40

Also need to bear in mind that Saudis spend billions with the US on weapons. So if Saudis turn to say Russia for their arms instead of US, big impact on US arms manufacturers. Trump can only slap their wrists for so long!

[deanroberthunt] 24/11/2018 21:16

What a difference a few weeks makes, $88 Oil, 147p sp, easily within covenants, we all talked (well some) of possibly 200p by Xmas...

Now, $59 Oil, 64p sp, we're talking of not meeting covenants, maybe even worse...it almost beggars belief...I bought some at 81p, 77p & 73p...and I'm disappointed...crikey, Imagine that in October!

[datait] 24/11/2018 21:04

Lodgeview

Stay strong ride it out if you can, I'm happy to hold and top up when I can, I'm also down 8k in a short time. As far as om concerned I got around 74p then topped up at 65p. You got on at 84p think about them who got in at £1.46 we still got in a lot less.

It's only money have my health and there is far more worse off I consider myself very lucky in life.

[datait] 24/11/2018 20:52

Why go to war with Iran when Trump has the upper hand on the Saudis after the killing of the reporter, saudi will now back trump on getting oil price down to hurt Iran for sided with them and doing nothing of the killing.

This is nothing more than politics. Pmo are in a good place right now even if oil falls more they have covered their oil price and still making plenty.

I'm holding this out topped up at just over 65p and will continue to when funds available this is a great opportunity in my book.

[lodgeview] 24/11/2018 20:35

Yes thanks crystalball

[crystball] 24/11/2018 20:03

The source of this article is

It is useful to know the source of any cut and pasted articles.

[lodgeview] 24/11/2018 17:03

It's been a painful few weeks for Premier Oil (LSE: PMO) shareholders. The oil and gas producer's share price has fallen by more than 50% since the start of October, when it hit a 52-week high of 146p.As a shareholder, I have a keen interest in this situation. So today I'm going to take a fresh look at Premier. I'll explain why the share price fall has been so brutal, and ask whether the shares are still worth buying.What's really happenedYou probably already know that the price of Brent Crude oil has fallen by around 30% since the start of October, from a high of $86.70 to about $60.It's no surprise that oil stocks have suffered. But you may wonder why Premier's share price has fallen by over 50% when the price of oil has only dropped about 30%.There's a good reason for this. The cost of producing a barrel of oil is relatively constant over short periods. For our purposes, we can consider it to be a fixed cost. This means that if the price of oil rises, the extra sales revenue is almost all profit.In a rising market, the firm's profits from selling oil will rise more quickly than the price of oil. On the other hand, when the price of oil falls, Premier's profits will fall more quickly than the oil price. This is an effect known as operating leverage.Although I've simplified it considerably, I estimate that a 10% increase in the price of oil could increase Premier's profits by as much as 14%. I hope this makes it easy to understand why oil shares can move so sharply when the price of oil changes.Still making good progressA recent trading update made it clear that Premier is still making good progress. Production is up, spending is down, and operating expenses are under control, at $17-$18 per barrel.The firm has also put in place new hedging contracts for 2019, covering over 30% of planned production. They guarantee a minimum oil price of $69 per barrel during the first half of the year, and of $72 per barrel during the second half.Chief executive Tony Durrant expects net debt to fall by $320m to $2.4bn this year, which he says will reduce the group's net debt-to-EBITDA ratio to 3x. Although this is still high, Mr Durrant expects this ratio to fall further in 2019. I believe this could open the door to a more normal valuation for the firm.Too cheap to ignore?Broker forecasts for 2018 and 2019 have actually risen over the last three months, despite October's oil price slump. Analysts appear to remain confident that the company can return to profit and continue repaying its debts.If that view is correct, the stock's 2018 forecast price/earnings ratio of 4.6 may be too cheap. A forecast P/E of 2.7 for 2019 also seems to be pricing in a lot of bad news. I continue to rate the shares as a buy.

[fireplace22] 24/11/2018 12:27

Saudi and Russia meet at the G20 next week - we may get an early surprise - one way or t'other.

[lodgeview] 24/11/2018 12:24

This could swing upwards just as fast as it's fallen of OPEC agree to cut and Zama appraisal comes good.

[hoper2] 24/11/2018 12:22

American Idiot - Enquest is also loaded down with debt. We all have our own favorites, but if I can get in at a decent price I think Cairn is interesting. It would make a change holding shares in a company that's almost debt free.

[steve73] 24/11/2018 12:15

More thanks..

btw.. re. the bonds.. yes, there was a significant lag last time... not sure how to show the plot, but link should take you there.

[deanroberthunt] 24/11/2018 11:23

Bonds lag the equity

[colebrooke] 24/11/2018 11:20

I disagree. The bonds have hardly moved from a high of 103.25 in June. So why the divergence?

[john09] 24/11/2018 11:16

There will be a lag in the bonds dropping, but they are dropping and will drop

[steve73] 24/11/2018 11:15

Good point on the bonds.. if there were serious doubts to our future then they'd be hit like before, since they are junior to the rest of the debt.

[steve73] 24/11/2018 11:13

Thanks all... some good sensible discussion..

One Q... what's the "covenant debt" - and why is it different from "Net debt"..?

Refinancing fee was last year, and it was only 1% (so c.30MM, perhaps some other costs there.).. But it shouldn't have affected this years debt reduction at all, although most of the interest rates are 1.5% higher. Most of our remaining debt is LIBOR linked, so there's been a 1/2% increase there during this year. (have they "costed" this increase for the balance of the loan terms in some way?)

I realize there's been high CAPEX on Catcher (@ 50% WI), but that's finished now although Zama's started (at 25% WI) so may be a slight reduction there going forwards. And of course Sealion study work has been ramping up. It would be nice to get a CAPEX breakdown.

[colebrooke] 24/11/2018 11:12

PMO Retail Bonds closed yesterday at 99p. In Jan 2016 they were at 38p low. Big difference.https://www.londonstockexchange.com/exchange/prices-and-markets/retail-bonds/company-summary-chart.html?fourWayKey=XS0997703250GBGBPUKCP