REG - Harbour Energy PLC - Trading and Operations Update

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RNS Number : 9381P  Harbour Energy PLC  22 January 2026

Harbour Energy plc

("Harbour")

Trading and Operations Update

22 January 2026

 

Harbour Energy today provides the following unaudited Trading and Operations
Update for the year ended 31 December 2025, ahead of announcing its Full Year
Results on 5 March 2026.

 

Linda Z Cook, Chief Executive Officer, commented:

"2025 was another year of strong delivery, driven by excellent operational
performance, strict capital discipline and the successful integration of new
assets. This drove production to the top end of guidance and stronger than
anticipated free cash flow generation, despite softer commodity prices.

We materially advanced our strategy during the year. This included improving
our cost structure in the UK, building momentum at our key development
projects in Mexico and Argentina, and announcing the divestment of non-core
assets and disciplined M&A.  Collectively these activities will enhance
our portfolio and materially increase our future free cash flow.

Looking to 2026, our priorities include delivering another year of outstanding
operational performance, continuing to mature our organic growth
opportunities, strengthening the balance sheet and completing the announced
transactions, all of which position us better for the future."

 

 Strong operational delivery
 § Production averaged 474 kboepd (2024: 258 kboepd), up 84% and at the top
 end of guidance, driven by a full year contribution from Wintershall Dea and
 excellent operational execution
 § Production was split approximately 40% liquids, 40% European gas and 20%
 other gas
 § Unit operating costs averaged $13.0/boe (2024: $16.5/boe), a c.20%
 reduction and lower than guidance. This reflects the addition of the
 Wintershall Dea assets, strong volumes and cost performance together with the
 divestment of Vietnam more than offsetting FX headwinds
 § Total recordable injury rate (TRIR) of 1.1 per million hours worked (2024:
 1.0)
 § Net equity greenhouse gas intensity materially reduced to 14 kgCO(2)/boe
 (2024: 19 kgCO(2)/boe)
 § High return, short cycle investments progressed, supporting near term
 production:
 -    Development wells onstream in Norway, the UK, Argentina, Germany and
 Egypt
 -    Fenix (Argentina) and Maria Phase 2 (Norway) projects successfully
 completed
 -    Five subsea developments in Norway on track to start up within the
 next 24 months, including first gas from Harbour's operated Dvalin North
 expected mid-2026
 -    In Egypt, post period end, final investment decision taken for the
 development of the Fayoum-Messinian field, close to West Nile Delta
 infrastructure, with first gas targeted for end 2026 (within two years of
 discovery)
 § Exploration and appraisal successes in Norway and Egypt. This includes at
 Dissouq (Egypt) with EZZ-1 bought onstream in January 2026, only two months
 after discovery, while appraisal drilling is underway at EZZ-2
 § Post period end Harbour was awarded nine exploration licences (four as
 operator) close to existing infrastructure in the APA 2025 licensing round in
 Norway
 § Carbon capture and storage (CCS) projects in Denmark advanced with the
 Greensand Future project (Harbour 40%) on track to commence commercial
 operations around the end of this year while a large onshore 3D seismic survey
 is underway at Harbour's operated Greenstore project
 Material strategic progress
 § Good momentum on strategic projects underpinning future reserves
 replacement and optionality:
 -    Operatorship of the c.750 mmboe gross Zama oil field (Harbour 32%)
 transferred from Pemex to Harbour and a more capital efficient phased
 development plan submitted to the regulator
 -    Also in Mexico, FPSO options for the Harbour operated 150 mmboe gross
 Kan oil field (Harbour 70%) are being matured with FEED planned for later this
 year
 -    Southern Energy (Argentina), a two-vessel c.6 mtpa LNG project
 (Harbour 15%), is on track to commence operations end 2027. Construction of
 the pipeline, which will connect the LNG vessels to the onshore facilities,
 and conversion of the second vessel (MKII) are underway
 § Integration of Wintershall Dea assets completed with the Transitional
 Services Agreement exited on schedule in September. Focus is now on systems
 and process simplification and driving efficiencies with early savings already
 captured
 § Active portfolio management with the divestment of our assets in Vietnam;
 in addition, decisions taken to exit several exploration licences in Mexico
 and certain non-core CCS licences in the Netherlands and the UK
 § In December, Harbour announced three complementary, strategic transactions:
 -     Indonesia divestments ($215 million): Sale of NSBA and the Tuna
 project, improving portfolio quality and accelerating value creation.
 Completion targeted for Q2 2026
 -     Acquisition of Waldorf in the UK ($170 million): Significant
 financial synergies through the release of c.$350 million of trapped cash and
 c.$900 million of tax effected UK tax losses. Completion targeted for Q2 2026
 -     LLOG Exploration acquisition in the US ($3.2 billion): Unique
 opportunity to enter US Gulf at scale, securing a fully operated, oil-weighted
 portfolio with long reserve life and compelling growth as well as one of the
 most highly regarded and experienced teams in the region. The acquisition is
 free cash flow per share accretive from 2027 and is expected to drive
 material, free cash flow growth.  Completion expected Q1 2026

 

 Upgraded free cash flow generation
 § Realised post-hedge oil, European gas and other gas prices of $69/bbl
 (2024: $82/bbl), $13/mscf (2024: $11/mscf) and $4/mscf (2024: $4/mscf),
 respectively
 § Increased revenue of $10.3 billion (2024: $6.2 billion) and EBITDAX of
 c.$7.1 billion (2024: $4.0 billion), up 66% and 78% respectively, driven by
 higher production
 § Total capital expenditure (including decommissioning) of $2.3 billion
 (2024: $1.8 billion), lower than guidance of c.$2.4bn due to reduced activity
 in the UK and phasing of some Norway spend
 § Increased free cash flow of $1.1 billion (2024: $0.1 billion). This is
 c.$0.1 billion higher compared to the outlook provided in November, driven by
 continued strong operational delivery, and reflects an overall $0.5 billion
 upgrade to Harbour's original 2025 free cash flow outlook provided in January
 2025, once normalised for commodity prices
 § Pre-swap net debt reduced to $4.4 billion (2024: $4.7 billion) 1 ,
 reflecting strong free cash flow generation partially offset by a c.$0.6
 billion FX translation effect on our European denominated senior bonds.
 Leverage reduced to 0.6x (2024: 0.7x) 2 
 § Strong hedge position with mark to market gain of $0.5 billion at 31
 December 2025. For 2026, c.50% of our economic exposure to European gas prices
 and c.40% of our economic exposure to Brent is currently hedged at $11/mscf
 and $71/bbl respectively

 

 2026 Guidance and outlook 3 
 2026 guidance excludes the impact of the announced sale of Harbour's
 Indonesian assets and the acquisitions of Waldorf in the UK and LLOG in the US
 (unless stated otherwise).
 § Production of 435-455 kboepd, supported by new projects and wells onstream,
 including in Norway, partially offsetting UK managed decline and sale of
 Vietnam
 § Unit operating costs of c.$13.5/boe
 § Total capital expenditure (including decommissioning spend) of $1.7-1.9
 billion reflecting continued high grading of the portfolio, reduced UK
 investment and strict capital discipline
 § At $65/bbl Brent and $11/mscf European gas, 2026 free cash flow outlook of
 c.$0.6 billion 4 , reflecting the current commodity price environment and in
 line with the three-year free cash flow sensitivity provided at Harbour's 2025
 Capital Markets Update
 § As previously announced, Harbour intends to move its distributions policy
 to a payout ratio approach. Details of the new policy will be provided on 5
 March alongside the Company's 2025 Full Year Results
 § Assuming the LLOG, Waldorf and Indonesia transactions complete as
 anticipated during 2026, Harbour expects:
 -     Production rates to increase towards 500 kboepd by year-end
 -     Operating costs to remain below $15/boe
 -     Effective tax rate to start to reduce, reflecting limited US tax
 payments near term and as we benefit from acquired Waldorf UK tax losses

 

 Enquiries
 Harbour Energy
 plc
 +44 (0) 203 833 2421
 Elizabeth Brooks, SVP Investor Relations
 Andy Norman, SVP Communications
 Email: CorporateExternalCommunications@harbourenergy.com
 (mailto:CorporateExternalCommunications@harbourenergy.com)

 

Appendix:

 

Hedging schedule

                  2026                   2027                   2028
                  Volume  Average Price  Volume  Average Price  Volume  Average Price
                  mmboe   $/mscf         mmboe   $/mscf         mmboe   $/mscf
 Europe / UK gas  26      11             13      10             2       10
                  mmbbl   $/bbl          mmbbl   $/bbl          mmbbl   $/bbl
 Oil              16      71             8       63             -       -

As at 31 December 2025

 

Group production

               1 Jan  - 31 December 2025   1 Jan  - 31 December 2024

               (net, kboepd)               (net, kboepd)
 Norway        169                         52
 UK            155                         149
 Germany       28                          10
 Argentina     73                          21
 Mexico        10                          4
 North Africa  31                          12
  SE Asia      7                           11
 Total Group   474                         258

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

( )

 

 1  Net debt excludes hybrids and unamortised fees.

 2  Leverage is net debt/LTM EBITDAX. 2024 EBITDAX reflects proforma Harbour
numbers

 3  2026 guidance assumes a US dollar to GBP sterling exchange rate of
$1.35/£, US dollar to Euro exchange rate of $1.15/€ and a Norwegian NOK to
US dollar exchange rate of NOK10.25/$

 4  A $5/bbl change in 2025 Brent oil prices or a $1/mscf change in 2026
European gas prices impacts free cash flow by c.$150 million. Free cash flow
sensitivity assumes mid-point of production and capex guidance. A 1:1
conversion rate for $/mmbtu to $/mscf has been assumed.

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