REG - Harbour Energy PLC - Trading and Operations Update

Harbour EnergyAnnouncement

07/11/2024 07:00

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RNS Number : 2677L  Harbour Energy PLC  07 November 2024

Harbour Energy plc

("Harbour")

Trading and Operations Update

7 November 2024

 

Harbour Energy today provides the following unaudited Trading and Operations
Update for the nine months to 30 September 2024.

 

Actuals to 30 September 2024 reflect the completion of the Wintershall Dea
acquisition on 3 September 2024 and include approximately one month's
contribution from the acquired portfolio. 2024 guidance includes approximately
four months' contribution from the Wintershall Dea portfolio.

 

 Operational highlights
 § Transformational Wintershall Dea portfolio acquisition completed ahead of
 schedule; integration progressing as planned

 § A continued focus on safety with a total recordable injury rate of 0.96 per
 million hours worked (2023: 0.89)

 § Average production of 177 thousand barrels of oil equivalent per day
 (kboepd) to end September (2023: 189 kboepd). Full year 2024 guidance narrowed
 upwards to 255-265 kboepd (250-265 kboepd previously)
 -    Production start-up from the Fenix gas project (Argentina) in
 September, ahead of plan
 -    New wells on-stream in Q3, including at Njord (Norway), Armada (UK)
 and Greater Britannia Area (UK)
 -    October production averaged 503 kboepd following completion of Norway
 and UK planned maintenance shutdowns

 § Operating costs averaged $19.5/barrel of oil equivalent (boe) for the
 period (2023: $16/boe). 2024 guidance of $16-17/boe is reiterated, reflecting
 the addition of the lower cost Wintershall Dea portfolio and expected higher
 production in Q4

 § High return, short cycle investments on track, including Talbot (UK) first
 oil anticipated around year end, Maria Phase 2 (Norway) production start-up
 expected in 2025, and a multi-pad drilling campaign underway at APE Vaca
 Muerta (Argentina)

 § Growth opportunities advanced, underpinning future reserves replacement and
 portfolio longevity
 -    Norway: Successful appraisal of the Storjo gas discovery and appraisal
 drilling underway at the Harbour-operated Sabina discovery, both potential
 subsea tie-backs to the Skarv FPSO
 -    UK: Oil discovery at Gilderoy, close to Harbour-operated Greater
 Britannia infrastructure
 -    Mexico: Zama FEED progressing; appraisal drilling ongoing at
 Harbour-operated Kan discovery
 -    Indonesia: Multi-well exploration and appraisal campaign completed at
 Andaman, confirming the potential of the play; additional Harbour-operated
 licence secured with the award of Central Andaman
 -    European CCS: Assessment of our enlarged CO(2) transportation and
 storage portfolio underway, with a focus on building a competitive business
 with long-term cash flow potential

 

 

Financial highlights

 § Estimated revenue to end of September of $3.1 billion, with realised
 post-hedging oil, European and non-European gas prices of $82/bbl, $9/mscf and
 $6/mscf respectively

 § Total capital expenditure to end of September of c.$1.0 billion. Full year
 2024 guidance revised to c.$1.8 billion from c.$1.7 billion. This reflects
 phasing of spend between pre- and post-completion of the Wintershall Dea
 acquisition versus that estimated at the time of completion. Proforma total
 capital expenditure for 2024 unchanged at c.$2.7 billion.

 § Estimated net debt of $4.7 billion at 30 September. Year-end net debt
 expected to be of a similar level, based on an estimated c.$250 million
 negative working capital movement and current commodity price outlook
 -    Estimated full year 2024 free cash flow of c.$300 million, excluding
 shareholder distributions and one-off acquisition-related costs. Equivalent
 proforma free cash flow estimated at $1.1 billion
 -    2024 one off acquisition-related costs, including change of control
 payments for seismic data, totalling c.$250 million

 § Interim dividend of c.$100 million paid in September, in line with
 Harbour's prior $200 million annual dividend policy. As previously guided,
 annual dividend increased to $455 million (comprising $380 million for
 ordinary shares, $75 million for non-voting shares) to be paid in two equal
 instalments, starting with a final dividend for 2024 to be paid in May 2025,
 subject to shareholder approval

 § Successful issuance of €1.6 billion of senior bonds (completed October)
 enabling repayment and cancellation of the $1.5 billion bridge facility
 utilised for the Wintershall Dea portfolio acquisition
 § Corporate and senior unsecured issue credit ratings upgraded to investment
 grade Baa2, BBB- and BBB- from Moody's, S&P and Fitch, respectively

Upcoming events

Harbour's next scheduled market update will be in January 2025 when the
Company will issue a Trading & Operations update. In addition, Harbour
plans to host a capital markets event in the first half of 2025.

 

Linda Z Cook, Chief Executive Officer, commented:

"We continued to deliver on our strategy through the completion of the
Wintershall Dea acquisition and strong operational and financial performance.

 

"Our expanded global portfolio is performing well, achieving production rates
of over half a million barrels per day in October, generating material cash
flow and presenting multiple high return organic investment opportunities.
These, together with our strong team, disciplined capital allocation and
investment grade credit ratings, mean we are well-positioned for the future."

 

 

Enquiries

Harbour Energy
plc
+44 (0) 203 833 2421

Elizabeth Brooks, SVP Investor Relations

Andy Norman, SVP Communications

 

Brunswick (PR advisors)
 
+44 (0) 207 404 5959

Patrick Handley

Will Medvei

 

Appendix:

 

Hedging schedule

 

             2025                   2026                   2027
             Volume  Average Price  Volume  Average Price  Volume  Average Price
             mmboe   $/mscf         mmboe   $/mscf         mmboe   $/mscf
 Europe gas  31      13             17      10             2       10
             mmbbl   $/bbl          mmbbl   $/bbl          mmbbl   $/bbl
 Oil         16      76             12      73             0       -

 

 

Group production

Production to end September includes approximately one month's contribution
from the Wintershall Dea portfolio.

 

              1 Jan 2024 - 30 Sept 2024

              (net, kboepd)
 UK           142
 Norway       10
 Germany      3
 Argentina    7
 Mexico       1
 MENA         4
 SE Asia      11
 Total Group  177(1)

 

 

(1) Owing to rounding, the above total does not match the sum of the component
parts

 

 

 

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