REG - Harbour Energy PLC - Trading and Operations Update

Harbour EnergyAnnouncement

29/11/2023 07:00

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RNS Number : 9768U  Harbour Energy PLC  29 November 2023

Harbour Energy plc

("Harbour" or the "Company")

Trading and Operations Update

29 November 2023

 

Harbour Energy plc provides the following unaudited Trading and Operations
Update for the nine months to 30 September 2023.

 

Operational highlights

 § Production averaged 189 kboepd (2022: 207 kboepd), split c.50% liquids,
 c.50% gas. Full year guidance of 185-195 kboepd is unchanged.

 § Operating costs averaged $16/boe (2022: $14/boe) for the period. Full year
 guidance unchanged at c.$16/boe, with strong cost control offset by lower
 volumes.

 § Strong safety record with total recordable injury rate of 0.9 per million
 hours worked

 § High return, short cycle, infrastructure-led UK investment opportunities
 progressed, supporting future production and cash flow
 -     Tolmount East production start-up underway, increasing future rates
 from the Tolmount area
 -     Leverett discovery, close to Harbour's operated Britannia
 infrastructure, successfully appraised with good flow rates achieved; planned
 final appraisal side track underway
 -     Talbot on track to deliver first oil, via the Harbour operated Judy
 platform, around the end of 2024, with two of the three development wells
 completed

 § International growth projects advanced with the potential to materially
 increase our reserve life
 -     The drilling of Layaran, the first of a multi-well Andaman Sea
 (Indonesia) exploration campaign, is ongoing.  This follows the Timpan-1 gas
 discovery in 2022.  Three additional prospects on the Andaman South and
 Andaman II licenses will be drilled as part of this campaign.
 -     Zama (Mexico) commercial agreements progressed with preparation for
 FEED underway
 -     Kan (Mexico) appraisal plan submitted to the regulator following the
 oil discovery in April with drilling scheduled for 2024

 § Continued progress on Harbour's CCS projects.  For the Harbour-led Viking
 project, this includes entering FEED and the successful submission of the
 Development Consent Order for the onshore pipeline, marking important
 milestones for the project.

 

Financial highlights

 § Estimated revenue for the period was $2.9 billion with realised
 post-hedging oil and UK gas prices of $77/bbl and 53 pence/therm, reflecting
 legacy hedging put in place at the time of the Premier acquisition

 § 2023 total capex guidance of c.$1 billion reiterated, reflecting increased
 drilling activity in the second half of the year

 § Forecast 2023 free cash flow of c.$1 billion, after expected total cash tax
 payments of $0.4 billion, and before shareholder distributions, reiterated

 § Shareholder distributions of c.$440 million completed year to date. This
 includes c.$240 million of share buybacks and an interim dividend paid in
 October of c.$100 million.  The dividend payment was in line with our $200
 million annual dividend policy and represented a nine per cent dividend per
 share growth year-on-year

 § Net debt of c.$0.3 billion at period end, an increase on half year mainly
 due to UK tax payments made in the third quarter; potential to be net debt
 free in 2024 unchanged

 § Successful outcome of RBL facility amendment and extension on favourable
 terms with borrowing base increased to $1.3 billion and maturity extended to
 December 2029

 

Linda Z Cook, Chief Executive Officer, commented:

"We have continued to maximise the value of our UK oil and gas portfolio and
to progress our diversification opportunities in Mexico, Indonesia and CCS
while maintaining strong cost control and capital discipline. This has enabled
significant free cash flow generation and a robust balance sheet, supporting
material shareholder returns over and above our base dividend.

 

We also continue to evaluate a number of material M&A opportunities in
line with our stated strategy, as we seek to build a global and diverse oil
and gas company. Recent large transactions in our sector and our own
discussions with potential counterparties indicate that market conditions for
M&A are improving.  We remain disciplined, balancing the return of excess
capital to shareholders with ensuring flexibility for meaningful, value
accretive M&A which would support shareholder returns over the longer
run."

 

Enquiries

Harbour Energy plc

Elizabeth Brooks, Head of Investor Relations

Tel: +44 203 833 2421

 

Brunswick

Patrick Handley, Will Medvei

Tel: +44 207 404 5959

 

 

Appendix 1: Group production

                              1 Jan - 30 Sept 2023  1 Jan - 30 Sept 2022

                               (net, kboepd)         (net, kboepd)
    Greater Britannia Area    27                    32
    J-Area                    34                    29
    AELE hub                  20                    27
    Catcher                   19                    19
 Tolmount                     13                    12
 East Irish Sea               6                     8
    Elgin Franklin(1)         20                    24
    Buzzard                   11                    15
    Beryl                     14                    11
    West of Shetlands(1)      13                    15
    Other North Sea(2)        2                     2
 North Sea                    178                   194
 International                11                    13
 Total Group                  189                   207

(1) West of Shetlands comprises Clair, Schiehallion and Solan. (2)Other North
Sea includes Galleon, Ravenspurn North, and Johnston.

 

                              1 Jan - 30 Sept 2023      1 Jan - 30 Sept 2023

                               (net liquids, kboepd)     (net gas, kboepd)
    Greater Britannia Area    9                         18
    J-Area                    16                        18
    AELE hub                  5                         15
    Catcher                   18                        1
 Tolmount                     1                         13
 East Irish Sea               0                         6
    Elgin Franklin(1)         8                         12
    Buzzard                   11                        0
    Beryl                     10                        4
    West of Shetlands(1)      12                        1
    Other North Sea(2)        0                         1
 North Sea                    89                        89
 International                4                         7
 Total Group                  93                        96

(1) West of Shetlands comprises Clair, Schiehallion and Solan. (2)Other North
Sea includes Galleon, Ravenspurn North, and Johnston.

 

Appendix 2: Hedging schedule(1)

          2023                      2024                      2025                    2026
          Volume    Av. price       Volume    Av. price                 Av. price     Volume  Av. price
          (mmboe)   (p/th, $/bbl)   (mmboe)   (p/th, $/bbl)
         p/th, $/bbl   mmboe   p/th, $/bbl

                                                              Volume
                                                              (mmboe)
 UK gas
 Swaps    21.5      40              10.1      54              5.7       87            1.2     106
 Collars  1.6       55-69           3.0       112-263         1.7       98-233        0.4     80-150
 Oil
 Swaps    11        74              7.3       84              3.7       77            0       0

(1) As at 30 September 2023

Appendix 3: 2023 guidance

                          2023 Guidance    Actual                    2023 Guidance

                          (as at Aug 23)   (1 Jan to 30 Sept 2023)   (as at Nov 23) Unchanged
 Production (kboepd)      185-195          189                       185-195
 Operating costs ($/boe)  c. 16            c. 16                     c. 16
 Total capex ($ billion)  c.1.0            c.0.7                     c.1.0

 

 

 

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