Harbour Energy revenue jumps after boost in production
By Josh White
Date: Thursday 23 Jan 2025
(Sharecast News) - Harbour Energy announced a sharp rise in revenue to $6.1bn for the year ended 31 December in an update on Thursday, up from $3.7bn in 2023.
The FTSE 250 company put the increase down to a significant boost in production following its transformational acquisition of Wintershall Dea's portfolio in September.
Production averaged 258,000 barrels of oil equivalent per day (boepd), a 40% increase year-on-year, with liquids accounting for 40% of output, European gas 45%, and non-European gas 15%.
On a pro forma basis, production reached 479,000 daily equivalent barrels.
Unit operating costs remained steady at $16.5 per barrel of oil equivalent, while realised oil and gas prices showed mixed results, with oil at $82 per barrel and European gas at $11 per million standard cubic feet.
EBITDAX rose to $4.1bn, up from $2.7bn in 2023.
However, Harbour anticipated its pre- and post-tax income would be affected by non-cash charges related to changes in the UK fiscal regime.
Capital expenditure increased to $1.8bn, including $300m allocated to decommissioning.
Harbour reported being broadly free cash flow neutral for the year, excluding one-off acquisition-related costs and shareholder distributions.
The results were impacted by a material negative working capital movement and an unplanned outage in the East Irish Sea during the fourth quarter.
Shareholder distributions fell to $200m, bringing total returns over the past three years to $1.2bn.
Net debt stood at $4.7bn as of 31 December, unchanged from the prior quarter.
The company highlighted improvements to its debt structure, including replacing its reserves-based debt facility with more flexible unsecured bank facilities, alongside credit rating upgrades from Moody's, S&P, and Fitch to investment grade.
Operationally, Harbour noted key milestones with the start-up of projects in Argentina and the UK, successful drilling campaigns in Norway and the UK, and advances in major growth projects, including Zama in Mexico and Andaman in Indonesia.
The company also completed its first carbon capture and storage final investment decision for the Greensand project in Denmark.
Looking ahead, Harbour forecast production of 450,000 to 475,000 barrels of oil equivalent per day in 2025, supported by a full year of contributions from the Wintershall Dea portfolio.
Unit operating costs were expected to fall to around $14 per barrel of oil equivalent, while capital expenditure is projected to increase to between $2.4bn and $2.6bn.
The company estimated free cash flow of $1bn, assuming Brent crude prices of $80 per barrel and European gas prices of $13 per million standard cubic feet.
Harbour said it also planned to distribute $455m in dividends for 2025, in line with its updated policy.
"2024 was a transformational year with the completion of the Wintershall Dea transaction delivering a step change in our scale and geographic diversification, improving our margins, increasing our reserve life and expanding our resource base significantly," said chief executive officer Linda Z Cook.
"Looking to 2025, we will continue to prioritise safe and efficient operations as we complete the integration of our new business units, mature our significant 2C resource base and maintain disciplined capital allocation.
"With our high quality portfolio, financial strength and strong team, we are well-positioned for continued execution of our strategy."
At 0819 GMT, shares in Harbour Energy were down 1.99% at 283.54p.
Reporting by Josh White for Sharecast.com.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN