REG - Harbour Energy PLC - Half-year Results
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RNS Number : 3197U Harbour Energy PLC 07 August 2025
Harbour Energy plc
("Harbour" or the "Company")
2025 Half-year results
7 August 2025
Strong operational delivery drives free cash flow upgrade;
$100 million share buyback announced
Harbour today announces its unaudited half-year results for the six months
ended 30 June 2025.
Linda Z Cook, Chief Executive Officer, commented:
"Harbour delivered strong first-half results driven by excellent operational
execution and reflecting the benefits of the Wintershall Dea acquisition which
significantly enhanced the scale, resilience and longevity of our business,
supporting significant free cash flow generation.
Through the integration of the Wintershall Dea portfolio and in the midst of
market volatility, we took decisive action to strengthen our margins,
high-grade our capital programme and accelerate cost initiatives. These steps,
along with the strong results from the first half, have enabled us to upgrade
our free cash flow outlook for the year. In addition, we improved our
financial position by addressing near-term bond maturities and reducing net
debt. As a result, we remain confident in our ability to deliver on our
capital allocation priorities. These include further debt reduction and
additional shareholder returns via share buybacks, as demonstrated by the new
$100 million buyback programme announced today."
Strong operational delivery; growth opportunities matured
§ Increased and diversified production of 488 kboepd (H1 2024: 159 kboepd)
§ Unit operating costs c.30% lower at $12.4/boe (H1 2024: $18.5/boe)
§ Safety incident rate (TRIR) of 1.1 per million hours worked (H1 2024: 0.7)
§ Net equity GHG intensity more than halved to 12 kgCO(2)/boe (H1 2024: 27
kgCO(2)/boe)
§ New wells on-stream including at Maria Phase 2 (Norway), the Vaca Muerta
(Argentina) and in the UK; approved developments on track including start-up
of Dvalin North (Norway) in late 2026
§ Investment decision taken on Southern Energy SA, a 6 mtpa phased LNG
project in Argentina, creating the potential to unlock significant value for
our Vaca Muerta gas
§ Kan (Mexico) gross 2C resources estimate upgraded by 50% to c.150 mmboe
(Harbour share 70%)
§ Completed divestment of the Vietnam business on 9 July, post-period end,
marking an exit from the country
Significant free cash flow generation; strong financial position
§ Realised post-hedge oil and European gas prices of $71/bbl and $13/mscf (H1
2024: $85/bbl and $8/mscf), respectively
§ Increased revenue and other income of $5.3bn (H1 2024: $1.9bn) and EBITDAX
of $3.9bn (H1 2024: $1.2bn)
§ Increased free cash flow of $1.36bn (H1 2024: $0.38bn); net debt 1
(#_edn1) excluding unamortised fees reduced to $3.8bn (YE 2024: $4.7bn) and
leverage reduced to 0.5x (YE 2024: 1.1x)
§ Reported loss after tax of $0.2bn (H1 2024: profit $0.1bn) impacted by
$0.3bn deferred tax charge associated with changes to the UK fiscal regime and
$0.2bn of net foreign exchange losses
§ Increased adjusted profit after tax of $0.4bn (H1 2024: $0.1bn) equating to
higher adjusted earnings per voting ordinary share of 22 cents (H1 2024: 11
cents)
§ Successful issuance of $0.9bn of senior notes and €0.9bn of subordinated
notes, effectively pre-funding all maturities to 2028
§ Investment grade credit ratings with stable outlook confirmed
Improved 2025 outlook; increased shareholder distributions
§ Production guidance further narrowed upwards to 460-475 kboepd (from
455-475 kboepd), with the divestment of Vietnam more than offset by strong
production performance to date
§ Unit operating cost guidance lowered to c.$13.5/boe (previously
c.$14/boe) 2 (#_edn2) , reflecting the improved production outlook, cost
savings and divestment of Vietnam partially offset by the weaker US dollar
§ Total capital expenditure guidance unchanged at $2.4-$2.5bn
§ Free cash flow outlook increased to c.$1.0bn (from $0.9bn) 3 (#_edn3) ,
driven by continued strong operational delivery
§ Interim dividend of $227.5m, 13.19 cents per voting ordinary share (H1
2024: 13.00 cents), in line with $455m annual dividend policy
§ New $100m share buyback programme announced, bringing expected total payout
of free cash flow to c.55% for the year 4 (#_edn4)
Enquiries
Harbour Energy plc
Elizabeth Brooks, SVP Investor Relations
Andy Norman, SVP Communications
Tel: +44 (0) 20 3833 2320
Email: CorporateExternalCommunications@harbourenergy.com
Notes to editors
Unless stated otherwise all figures are in US dollars. Comparative figures for
the income statement relate to the period ended 30 June 2024 and the balance
sheet as at 31 December 2024. Alternative performance measures, including
EBITDAX and free cash flow, are reconciled within the Glossary - Non IFRS
measures at the end of the Financial Statements.
We have introduced alternative performance measures in our financial reporting
covering adjusted EBITDAX, adjusted profit after taxation, adjusted effective
tax rate and adjusted earnings per share. These are indicators that management
consider better reflect our true underlying operational and financial
performance in the period and facilitate a more meaningful period on period
comparison. Full details of our alternative performance measures, including a
reconciliation to the closest reported IFRS measure where applicable, can be
found in the Glossary - Non IFRS measures at the end of the financial
statements.
About Harbour Energy
Since its creation in 2014, Harbour has grown to become one of the world's
largest and most geographically diverse independent oil and gas companies.
Today, Harbour is producing over 450,000 barrels of oil equivalent per day
with significant production in Norway, the UK, Germany, Argentina and North
Africa. Harbour benefits from competitive operating costs and resilient
margins, and a broad set of growth options including near-infrastructure
opportunities in Norway, unconventional scalable opportunities in Argentina
and conventional offshore projects in Mexico and Indonesia.
With low GHG emissions intensity and a leading CO(2) storage position in
Europe, Harbour remains committed to producing oil and gas safely and
responsibly to help meet the world's energy needs.
Harbour is headquartered in London with approximately 3,400 employees and
direct contract staff across its operations and offices.
Summary of 2025 half-year performance
Step change in production
Production in the first half averaged 488 thousand barrels of oil equivalent
per day (kboepd) (H1 2024: 159 kboepd), split approximately 40 per cent
liquids, 40 per cent European natural gas and 20 per cent other natural gas.
The more than 200 per cent increase versus the first half of 2024 reflects the
addition of the Wintershall Dea portfolio, including 173 kboepd from Norway
and 75 kboepd from Argentina.
Production was supported by new projects and wells on-stream, and improved
reliability across the portfolio with operating efficiency of 93 per cent. In
addition, we saw strong subsurface delivery from our operated hubs in the UK
and from the recently completed Fenix project in Argentina which also
benefitted from strong local gas demand.
Full year 2025 production guidance is further narrowed upwards to 460-475
kboepd (455-475 kboepd previously). This reflects the first half results, July
production of 493 kboepd, good progress to date on the summer maintenance
shutdowns and the outlook for the remainder of the year, all more than
offsetting the impact of the Vietnam divestment (c.2 kboepd annualised) which
completed post period end.
Strong cost and capital discipline
We materially reduced our unit operating costs to $12.4/boe (H1 2024:
$18.5/boe), reflecting the addition of the lower cost Wintershall Dea
portfolio, strong volumes and supply chain synergies captured from leveraging
our increased scale. Full year 2025 unit operating cost guidance is lowered to
c.$13.5/boe. This reflects our improved production outlook, continued cost
control and the sale of our high-cost Vietnam business partially offset by our
weaker US dollar (USD) outlook of $1.35/£.
In May, Harbour took the decision to reduce its Aberdeen-based organisation by
c.25 per cent to lower its UK cost structure and align with reduced levels of
investment in the country given the challenging domestic fiscal environment.
The reorganisation is on track to complete by the end of the third quarter.
Total capital expenditure for the period was $1.1 billion (H1 2024: $0.6
billion), driven by the addition of the Wintershall Dea portfolio partially
offset by reduced UK investment. Previously narrowed full year guidance of
$2.4-$2.5 billion is reiterated.
A focus on safe and responsible operations
We remain focused on embedding a strong safety culture across our expanded
operations. While progress is being made, our total recordable injury rate
(TRIR) during the first half was higher at 1.1 per million hours (H1 2024:
0.7), in part reflecting the higher TRIR from the Wintershall Dea portfolio.
As part of the integration of the Wintershall Dea assets, we completed a
comprehensive Major Accident Hazard risk assessment across the expanded
portfolio; the results are being used to prioritise our safety improvement
activities.
In the first half we delivered a step change in our GHG intensity which
materially reduced to 12 kilograms of CO(2) per barrel of oil equivalent
(kgCO(2)e/boe) (H1 2024: 27 kgCO(2)e/boe) on a net equity share basis
reflecting the lower emissions intensity of the Wintershall Dea portfolio. We
remain on track to halve our gross operated emissions by 2030 compared to our
2018 baseline.
Maximising value from our producing assets
Harbour's 2025 capital investment is largely focused on infrastructure-led
opportunities, converting reserves into production and cash flow. These
opportunities are typically low risk, high return, short cycle investments
concentrated around our existing production hubs, predominantly in Norway, the
UK and Argentina.
In Norway, we delivered first oil in May from our operated Maria Phase 2
project, a four well tie-back to the Maria infrastructure. The first well was
safely delivered on schedule and within budget with the remaining wells
expected online by year end. At Harbour's operated Dvalin North project,
installation of the subsea infrastructure is significantly progressed with
development drilling on track for 2026. Subsea installation campaigns are also
underway at Alve North and Idun North, both being developed as multi-well
tie-backs to Skarv, and at the Irpa three well tie-back to Aasta Hansteen.
These projects - as well as infill drilling campaigns, including at Njord -
will help support Harbour's near-term production in the country.
In the UK, Harbour's investment in the first half was targeted at our two
largest operated hubs, J-Area and the Greater Britannia Area (GBA). At J-Area,
Jocelyn South was brought on-stream in March through Harbour's Judy platform,
just three months after discovery while, post period end, production started
up from the RK development well. Following completion of its planned
maintenance shutdown, contributions from these wells - together with continued
strong subsurface performance from Talbot - resulted in J-Area achieving
production rates not seen since 2013. The first half also saw continued
outperformance from GBA's satellite fields Callanish and Brodgar, with Brodgar
production supported by further plant optimisation and the H5 development well
which was successfully brought online in May.
In Argentina, at our offshore CMA-1 concession in the Tierra del Fuego
province, the Fenix project was completed with the third well on-stream in
January while a workover at the Aries platform was successfully executed ahead
of schedule. Onshore in the Vaca Muerta unconventional shale play, nine new
gas wells were drilled and six new wells were completed and connected during
the first half, helping to maintain production from the Aguada Pichana Este
concession which is currently facilities constrained.
Elsewhere, development activities across our three production hubs in Germany
- Mittelplate, Gas Nord and Emlichheim - continued to support stable
production, while in Egypt the first of two Raven West infill wells at West
Nile Delta was brought on-stream in February. In Indonesia, a two well
development campaign at Natuna Sea Block A commenced with production start-up
from the first well anticipated in the second half of the year.
A large and diverse 2C resource base with the potential for material reserves
replacement
Our 1.9 billion barrels of oil equivalent (bnboe) of 2C resources are split
broadly equally between high value, near infrastructure offshore
opportunities, including in Norway and Argentina; the Vaca Muerta shale play
onshore Argentina; and conventional offshore growth projects in Mexico and
Indonesia. Our focus is on maturing the most competitive projects within this
resource base into 2P reserves to support long term production.
In Norway, we continued to progress our pipeline of early phase projects. The
Gjøa subsea satellite projects, Gjøa Nord and Ofelia, are being matured to a
2026 final investment decision while development concept studies are underway
at Adriana/Sabina and Storjo (appraised in 2024) and Cuvette (discovered in
2024). The first half also saw exploration success with a small discovery at
the Skarv-E prospect close to our Skarv infrastructure.
In Argentina, Harbour and its partners took final investment decision (FID) in
May on Southern Energy SA (Harbour 15 percent interest), a phased two-vessel
LNG project with total capacity of six million tonnes per year (mtpa). This
marks a significant milestone, providing access to global markets for our
extensive Argentinian gas resource with the potential to accelerate the
development of our Vaca Muerta acreage. Production start-up from the first
vessel (Golar Hilli Episeyo) is expected around year end 2027, with the second
vessel (Golar MK II) anticipated to commence operations end 2028. Southern
Energy has also received approval under Argentina's RIGI legislation which
offers a range of investment, tax and foreign exchange incentives for large
projects, and was granted Argentina's first LNG export permit in April.
Also, in Argentina at the San Roque concession, following a successful
four-well pilot project in the oil window of the Vaca Muerta shale,
discussions to secure the unconventional licence are progressing between
partners and the government. In addition, post period end, our conventional
CMA-1 licences offshore Tierra del Fuego were successfully extended to 2041,
strengthening our ability to add additional 2P reserves from our existing
assets through further development activity.
In Mexico, we are focused on the development of our most competitive projects,
Kan and Zama, which together could yield reserves equivalent to over two
years' worth of Harbour's total production. Following completion of a
successful appraisal programme, we increased the gross resource estimate of
the Harbour-operated Kan field (Harbour 70 per cent) by 50 per cent to c.150
million barrels of oil equivalent (mmboe). Development options for Kan are now
being evaluated ahead of entering FEED (front-end engineering design). At Zama
(Harbour 32 per cent), discussions are progressing with partners around a
phased development concept. At c.750 mmboe gross resources, Zama is Mexico's
largest undeveloped discovery.
In Indonesia, we continue to evaluate development options for the
multi-trillion cubic feet (TCF) Andaman gas discoveries, including the
potential for a phased development starting with the Tangkulo field.
High-grading the CCS portfolio
We continue to selectively mature our most advantaged CCS projects while
moving to exit less competitive licences.
At our operated Viking project (Harbour 60 per cent) in the UK, FEED was
completed in March and the development consent order for the onshore pipeline
was approved in April. In light of continued UK government delays impacting
the overall project schedule, we welcomed the Chancellor's announced intention
to provide development funding up to a final investment decision.
In Denmark, the high return Greensand Future project (Harbour 40 per cent) is
on track to commence commercial operations from 2026 with an injection rate of
400 thousand tonnes per annum (ktpa). Onshore Denmark, Harbour has a 40 per
cent operated interest in Greenstore which is in the appraisal phase with
seismic acquisition planned for later this year.
In May, in line with the Havstjerne licence commitment, we delivered a CO(2)
storage appraisal well in the Norwegian North Sea safely and below budget.
Integration progressing as planned; active portfolio management
We have a proven track record of acquisitions, integration and actively
managing our portfolio. The integration of the acquired Wintershall Dea
portfolio is progressing as planned and we are on track to exit the
Transitional Service Agreement by the end of the third quarter.
We continue to actively manage our portfolio to ensure our capital and
resources are deployed in line with our strategy. To this end, we completed
the sale of our Vietnam business to EnQuest post period end (on 9 July),
marking a country exit for Harbour.
Significant cash flow generation and strong financial position
In the first half of the year, we generated $1.36 billion of free cash flow,
reflecting strong production and the second half weighting of our tax payments
and summer maintenance programmes. This significant cash flow was directed
towards payment of our final 2024 dividend of $227.5 million in May and
reducing our net debt by $0.9 billion to $3.8 billion at 30 June, in line with
our capital allocation priorities. The impact of the weaker USD increasing the
USD value of our pre-swap Euro-denominated senior bonds by $0.7 billion was
partially offset by the net addition of $0.4 billion of subordinated notes
issued during the period.
We actively manage our debt currency mix and interest rate exposure through
interest rate derivatives. At 30 June, c.60 per cent of our senior debt was
USD denominated on a post-swap basis compared to c.20 per cent on a pre-swap
basis, resulting in a mark to market gain of $0.2 billion on our
cross-currency swap portfolio.
During the first half, we issued $0.9 billion of senior notes and €0.9
billion of perpetual subordinated notes, concurrently repurchasing $0.3
billion and €0.5 billion of the 2026 senior and perpetual subordinated notes
callable in 2026. As a result, we have effectively pre-funded all our
maturities through to 2028, including the €1.0 billion of senior notes
maturing in September 2025, which, along with now being fully undrawn on our
revolving credit facility, results in expected total debt repayment of c.$0.6
billion during 2025 on a constant currency basis. The first half also saw our
investment grade credit ratings of Baa2 and BBB- with stable outlook
reconfirmed by Moody's and Fitch, respectively.
During the first half we realised post-hedge oil and European gas prices of
$71 per barrel (bbl) (H1 2024: $85/bbl) and $13 per thousand standard cubic
feet (mscf) (H1 2024: $8/mscf), respectively. This compares to average Brent
oil prices of $72/bbl and European gas prices of $13/mscf during the first
half of 2025. Looking ahead, we benefit from a strong hedge position with a
mark to market gain of $0.4 billion at 30 June. For the 18 months through to
the end of 2026, we have hedged approximately 40 per cent of our economic
exposure to Brent and 50 per cent of our economic exposure to European gas
prices at prices above the current forward curve.
Improved outlook including for shareholder distributions
As a result of our continued strong operational delivery and improved
production and cost outlook, we have increased our 2025 free cash flow outlook
by $0.1 billion to $1.0 billion, assuming $68/bbl and $12.7/mscf for the full
year.
In line with our $455 million annual dividend commitment ($380 million paid on
the voting ordinary shares), the Board is today declaring an interim dividend
for 2025 of $227.5 million, equating to 13.19 cents per voting ordinary share.
The interim dividend will be paid on 24 September 2025 to all shareholders on
the register as at 15 August 2025.
In addition, given the significant progress towards delivering our $0.5 to
$1.0 billion debt reduction target and confidence in our ability to continue
to sustain material cash flow through the commodity price cycle, we are today
announcing the commencement of a $100 million share buyback programme.
Assuming the buyback completes by year end, this brings our outlook for total
distributions to shareholders in 2025 to $555 million, up from $200 million in
2024. Based on our free cash flow outlook of c.$1.0 billion, this represents
an estimated payout ratio of c.55 per cent.
Financial Review
Summary of financial results
Analysis of these key metrics are discussed in detail across the following
pages of the Financial Review.
Six months ended 30 June Units 2025 2024
Unaudited Unaudited
Production and post-hedging realised prices
Production kboepd 488 159
Crude oil $/bbl 71 85
European gas $/mscf 13 8
Other gas $/mscf 3.5 13
Income statement
Revenue and other income $ million 5,271 1,916
EBITDAX(1) $ million 3,876 1,216
Adjusted EBITDAX(1,2) $ million 3,888 1,250
Reported (loss)/profit after taxation $ million (174) 57
Adjusted profit after taxation(1,2) $ million 410 86
Effective tax rate Per cent 111 85
Adjusted effective tax rate(1,2) Per cent 80 82
Basic (loss)/earnings per voting ordinary share cents/share (12) 7
Adjusted basic earnings per voting ordinary share(1,2) cents/share 22 11
Other key financial figures
Total capital expenditure(1) $ million 1,123 587
Operating cash flow $ million 2,446 953
Free cash flow(1) $ million 1,360 383
Shareholder returns paid(1) $ million 228 100
30 June 2025 31 Dec 2024
Unaudited Audited
Net debt(1 ) $ million 3,598 4,424
Leverage ratio(1) times 0.5 1.1
(1) Alternative performance measure - see Glossary for the definition.
Reconciliations between adjusted performance measures and reported measures
are provided within the Glossary.
(2) We have introduced additional alternative performance measures in our H1
2025 reporting covering "adjusted EBITDAX", "adjusted profit after taxation",
"adjusted effective tax rate" and "adjusted earnings per share". These are
indicators that management consider better reflect true operational and
financial performance in the period and facilitate a more meaningful period on
period comparison. Full details of our alternative performance measures,
including a reconciliation to the closest reported IFRS measure where
applicable, can be found in the Glossary - Non IFRS measures at the end of the
financial statements.
Income Statement
Six months ended 30 June 2025 2024
$ million Unaudited $ million Unaudited
Revenue and other income 5,271 1,916
Cost of operations (2,721) (1,178)
EBITDAX(1) 3,876 1,216
Adjusted EBITDAX(1) 3,888 1,250
Operating profit 2,021 542
Profit before taxation 1,635 392
Taxation (1,809) (335)
(Loss)/profit after taxation(1) (174) 57
Adjusted profit after taxation(1) 410 86
Cents/share Cents/share
Basic (loss)/earnings per voting ordinary share (12) 7
Adjusted basic earnings per voting ordinary share(1) 22 11
(1) Alternative performance measure - see Glossary for the definition.
Reconciliations between adjusted performance measures and reported measures
are provided within the Glossary.
Revenue and other income
Total revenue and other income increased to $5,271 million (H1 2024: $1,916
million).
Six months ended 30 June 2025 2024
$ million Unaudited $ million Unaudited
Revenue and other income 5,271 1,916
Crude oil 1,796 1,114
Gas 3,084 692
Condensate 267 81
Tariff income and other revenue 34 19
Other income 90 10
Revenue earned from production activities increased to $5,181 million (H1
2024: $1,906 million) after realised hedging losses of $28 million (H1 2024:
loss of $55 million). This increase was mainly driven by higher production
volumes and higher European gas prices partially offset by lower crude prices.
Crude oil sales increased to $1,796 million (H1 2024: $1,114 million) after
realised hedging gains of $35 million (H1 2024: gains of $1 million). This was
driven by higher production volumes partially offset by lower realised
post-hedging oil prices of $71/bbl (H1 2024: $85/bbl).
Gas revenue was $3,084 million (H1 2024: $692 million), split between European
gas revenue of $2,737 million (H1 2024: $638 million), after realised hedging
losses of $63 million (H1 2024: $56 million), and other gas revenue of $347
million (H1 2024: $54 million). The realised post-hedging price for European
and other gas was $13/mscf (H1 2024: $8/mscf) and $3.5/mscf (H1 2024:
$13/mscf), respectively.
Condensate revenue was $267 million (H1 2024: $81 million) and tariff income
was $34 million (H1 2024: $19 million). Other income amounted to $90 million
(H1 2024: $10 million) which includes partner recovery on lease obligations
and government subsidies in Argentina.
Cost of operations
Cost of operations increased to $2,721 million (H1 2024: $1,178 million)
driven primarily by the increased production levels in the enlarged group and
hence higher operating costs and depreciation of oil and gas assets.
Six months ended 30 June 2025 2024
$ million Unaudited $ million Unaudited
Cost of operations
Operating costs 1,142 561
Depreciation, depletion and amortisation 1,519 565
Other 60 52
Cost of operations 2,721 1,178
Total operating costs for operating cost per barrel(1) 1,091 534
(1) A reconciliation from operating costs is provided within the Glossary.
Total operating costs were higher period on period at $1,091 million (H1 2024:
$534 million). Operating costs were lower on a unit of production basis at
$12.4/boe (H1 2024: $18.5/boe) due to increased production, relatively lower
operating costs within the recently acquired business units and disciplined
cost control, particularly in the UK.
Depreciation, depletion and amortisation (DD&A) unit expense, which
reflects the capitalised costs of producing assets divided by produced
volumes, was $17/boe (H1 2024: $20/boe).
EBITDAX and Adjusted EBITDAX
EBITDAX was $3,876 million (H1 2024: $1,216 million), with the increase driven
by higher production and higher European gas prices. Adjusted EBITDAX,
adjusting for M&A and restructuring costs, was $3,888 million (H1 2024:
$1,250 million).
Impairments and Exploration Write Offs
The Group has recognised a pre-tax impairment charge on property, plant and
equipment of $186 million (H1 2024: $33 million). This primarily arose on
assets in our UK business unit, which continues to face a challenging fiscal
and regulatory environment, as a result of lower short-term commodity prices.
During the period, the Group expensed $97 million (H1 2024: $39 million) for
exploration and appraisal and CCS activities, nearly half of this related to
the Havstjerne licence commitment CCS appraisal well in Norway.
Net financing costs
Finance income amounted to $432 million (H1 2024: $15 million). The increase
compared to H1 2024 is mainly due to realised gains on foreign exchange
forward contracts of $213 million (H1 2024: $1 million), unrealised gains on
derivatives and financial instruments of $95 million (H1 2024: nil), and
interest income on higher cash balances resulting from increased operating
cash flow and bond issuances of $71 million (H1 2024: $13 million).
Finance expenses amounted to $818 million (H1 2024: $165 million). This
primarily included foreign exchange losses of $504 million (H1 2024: $5
million), comprising $230 million (H1 2024: $nil) from the revaluation of UK
and Norwegian cash tax liabilities and $193 million (H1 2024: $13 million
gain) from the revaluation of USD-denominated intercompany balances in
entities with non-USD functional currency. It also included interest and
expenses incurred of $116 million (H1 2024: $43 million) related to debt
facilities, bonds and leases and unwinding of the discount on decommissioning
provisions of $145 million (H1 2024: $92 million) which increased due to the
larger asset portfolio.
Earnings and taxation
Tax expense increased in H1 2025 to $1,809 million (H1 2024: $335 million).
The reported effective tax rate is 111 per cent per cent (H1 2024: 85 per
cent) which is higher than the headline rate of 78 per cent due to the impact
of the extension of the UK Energy Profits Levy (EPL) from 2028 to 2030 and
non-deductible unrealised foreign exchange losses. The Adjusted effective tax
rate was 80% (H1 2024: 82%). The tax expense is split between a current tax
expense of $2,003 million (H1 2024: $226 million) and a deferred tax credit of
$194 million (H1 2024: charge of $109 million).
Reported loss after tax amounted to $174 million (H1 2024: $57 million
profit). This resulted in reported loss per voting ordinary share of 12 cents
(H1 2024: earnings 7 cents per share). Adjusted profit after taxation amounted
to $410 million (H1 2024: $86 million) of which $33 million was attributed to
the subordinated notes holders and $377m was attributable to shareholders.
This resulted in adjusted basic earnings per voting ordinary share of 22 cents
(H1 2024: 11 cents per share).
Shareholder distributions
A final dividend with respect to 2024 of 13.19 cents per ordinary share was
proposed on 6 March 2025 and approved by shareholders at the AGM on 8 May
2025. The dividend was paid on 21 May 2025 to all shareholders on the register
as at 11 April 2025, totalling $228 million.
In line with the company's annual dividend policy, the Board is pleased to
announce an interim dividend of 13.19 cents per voting ordinary share,
totalling $228 million, to be paid on 24 September 2025 to all shareholders on
the register on 15 August 2025 (the "Record Date"). A dividend reinvestment
plan ("DRIP") is available to shareholders who would prefer to invest their
dividend in the shares of the company. To participate in the DRIP,
shareholders must submit their election notice to Equiniti, the company's
Registrar, by 3 September 2025 (the "Election Date").
The Board has also approved and is pleased to announce a share buyback
programme of the Company's voting ordinary shares for up to a maximum
aggregate consideration of $100 million. Pursuant to the authority granted by
shareholders at the AGM held on 8 May 2025, the maximum number of ordinary
shares which may be purchased by the Company is 215,873,417. The purpose of
the programme is to reduce the Company's share capital and all ordinary shares
purchased as part of this programme will be cancelled. The programme will
commence on 8 August 2025, and will end no later than 31 March 2026.
Statement of Financial Position
30 June 2025 31 Dec 2024
$ million Unaudited $ million
Audited
Assets
Goodwill 5,141 5,147
Non-current assets, excluding goodwill and deferred taxes 20,938 21,089
Deferred tax assets 147 130
Current assets excluding financial assets 5,359 3,489
Financial assets 782 189
Assets held for sale 224 277
Total assets 32,591 30,321
Liabilities and Equity
Borrowings net of transaction fees 6,309 5,229
Provisions 7,860 7,521
Deferred tax liabilities 6,885 6,221
Lease creditor 701 792
Financial liabilities 116 877
Other liabilities 4,084 3,197
Liabilities directly associated with assets held for sale 199 233
Total liabilities 26,154 24,070
Equity 6,437 6,251
Total liabilities and equity 32,591 30,321
Net debt 3,598 4,424
Assets
The increase in total assets of $2,270 million from $30,321 million to $32,591
million is mainly due to the increase in cash balances from $805 million to
$2,711 million resulting from positive free cash flow in the period, the two
bond issuances, net of repayments, and other financial assets increasing from
$189 million to $782 million, predominantly due to an increase in the value of
commodity and foreign exchange derivatives.
Liabilities
The increase in total liabilities of $2,084 million from $24,070 million to
$26,154 million is driven by increases in a number of factors including:
§ deferred tax of $664 million, mainly due to the tax effect of the increase
in fair value of derivatives and the revaluation of the deferred tax to
reflect the extension of the energy profits levy, offset by other items;
§ borrowings of $1,080 million due to the $0.9 billion bond issuance in the
period, net of $0.6 billion debt repayments adjusted for $0.7 billion of FX
and amortised fees;
§ current tax liability of $722 million due to the addition of material
Norway tax payables into our portfolio and the phasing of payment of these to
the second half of the year;
§ decommissioning provisions of $339 million mostly due to currency
translation movement and unwinding of the provisions, offset by payments in
the period;
§ trade and other payables of $165 million; offset by
§ a reduction in other financial liabilities of $761 million due to lower
derivative liabilities.
The net deferred tax position on the balance sheet is a liability of $6,738
million (Dec 2024: $6,091 million) after reclassification for assets held for
sale. This is primarily made up of deferred tax liabilities in respect of the
accelerated capital allowances ($9,612 million) offset by deferred tax assets
related to future decommissioning liabilities ($2,889 million).
Equity and reserves
Total equity increased to $6,437 million mainly due to the new issuance of
subordinated notes in the period of $970 million less the repayment of $558
million of existing notes. This net increase was offset by the dividend
payment to shareholders of $228 million and the reported loss for the period
of $174 million. Comprehensive income amounted to $190 million, comprising
predominantly $1,103 million of gains on cash flow hedges, partly offset by
the associated tax expense ($725 million) and $191 million of foreign exchange
adjustments.
Net debt
As at 30 June 2025, net debt was $3,598 million (Dec 2024: $4,424 million).
This consisted of borrowings amounting to $6,559 million (Dec 2024: $5,512
million) less unamortised fees of $250 million (Dec 2024: $283 million) and
cash balances of $2,711 million (Dec 2024: $805 million). The reduction in net
debt was driven by the free cash flow generated in the period and net cash
from the issuance and repayment of subordinated notes partially offset by the
impact of foreign exchange differences due to the weaker US dollar.
We have pre-funded our near-term debt maturities out to 2028. Our investment
grade rating was reaffirmed by Moody's (Baa2) and Fitch (BBB-) during the
period. Available liquidity, being undrawn revolving credit facility (RCF) of
$3.0 billion net of letters of credit drawn of $0.6 billion, plus cash
balances of $2.7 billion, was $5.1 billion at the end of the period, compared
with $1.9 billion at year end 2024.
As at 30 June 2025, the leverage ratio was 0.5x (Dec 2024: 1.1x) which has
reduced due to material net debt reduction during the period.
30 June 2025 31 Dec 2024
$ million $ million
Leverage ratio
Net debt(1) 3,598 4,424
Last Twelve Months EBITDAX(1) 6,678 4,006
Leverage ratio(1) 0.5 1.1
(1) Alternative performance measure - see Glossary for the definition.
Reconciliations between adjusted performance measures and reported measures
are provided within the Glossary.
Derivative financial instruments
We carry out hedging activity to manage commodity price risk, and to ensure
there is sufficient funding for future investments. As part of that, we have
entered into a series of fixed-price sales agreements and a financial hedging
programme for both oil and gas, consisting of swap and option instruments.
Hedges realised to date are in respect of both crude oil and European natural
gas.
The current hedging programme is shown below:
Hedge position H2 2025 2026 2027 2028
Oil
Total oil volume hedged (thousand bbls) 17,665 14,432 3,559 -
- of which swaps 15,598 14,158 1,186 -
- of which zero cost collars 2,067 274 2,373 -
Weighted average fixed price ($/bbl) 76.47 72.57 68.11 -
Weighted average collar floor and cap ($/bbl) 63.64 - 85.72 60.00 - 80.00 60.00 - 83.08 -
European natural gas
Gas volume hedged (thousand boe) 35,799 25,101 8,184 863
- of which swaps/fixed price forward sales 28,016 19,152 4,531 392
- of which zero cost collars 7,783 5,949 3,653 471
Weighted average fixed price ($/mscf) 14.30 11.82 11.18 10.97
Weighted average collar floor and cap ($/mscf) 12.25 - 24.65 9.60 - 18.15 8.38 - 15.96 7.90 - 17.01
At 30 June 2025, our financial hedging programme on commodity derivative
instruments showed a pre-tax positive mark-to-market fair value of $439
million (H1 2024: negative $102 million). Most of the commodity derivatives
were designated as cash flow hedges, therefore, changes in fair value were
reported in other comprehensive income. The ineffectiveness credit to the
income statement for the period was $40 million (H1 2024: $nil)
For foreign exchange derivative instruments, the pre-tax positive
mark-to-market fair value was $214 million (H1 2024: positive $1 million). Of
this total $171 million related to cross-currency interest rate swaps
designated as cash flow hedges relating to the Euro bonds where €2.4 billion
was hedged at a forward rate of between 1.1015 and 1.1209.
Statement of cash flows(1)
Six months ended 30 June 2025 2024
$ million Unaudited $ million Unaudited
Cash flow from operating activities after tax 2,446 953
Cash flow from investing activities - capital investment (960) (349)
Cash flow from investing activities - other(2) 76 20
Operating cash flow after investing activities 1,562 624
Cash flow from financing activities(3) (202) (241)
Free cash flow(4) 1,360 383
Cash and cash equivalents at 1 January 805 286
Free cash flow 1,360 383
Proceeds of issuance of bonds less repayments 632 -
Proceeds of issuance of subordinated notes less repayments 412 -
Net repayment of revolving credit facility (250) -
Dividends (228) (100)
Distributions paid to subordinated notes investors (38) -
Other cashflow items 18 (30)
Cash and cash equivalents at 30 June 2,711 539
(1) Table excludes financing activities related to debt principal movements.
(2) Excludes acquisition of subsidiaries, net receipt of $16 million.
(3 ) Interest and lease payments only, excludes shareholder distributions
and debt principal movements.
(4 ) Alternative performance measure - see Glossary for the definition.
Reconciliations between adjusted performance measures and reported measures
are provided within the Glossary.
Net cash from operating activities after tax amounted to $2,446 million (H1
2024: $953 million) after accounting for positive working capital movements of
$197 million (H1 2024: $89 million positive), net of movement in realised but
unsettled hedges of $3 million (H1 2024: $51 million). The Group made net tax
payments of $1,350 million in the period (H1 2024: $157 million) primarily in
relation to Norway ($1,064 million) and the UK ($247 million)
Capital investment on a cash basis was $960 million (H1 2024: $349 million)
which included property, plant and equipment spend of $724 million (H1 2024:
$199 million), and exploration and evaluation spend of $185 million (H1 2024:
$113 million).
Cash outflow from financing activities, excluding shareholder distribution and
debt principal movements, totalled $202 million (H1 2024: $241 million) split
between interest payments of $47 million (H1 2024: $87 million), and lease
principal and interest payments of $155 million (H1 2024: $154 million).
Financing activities in the period included the issuance of a $900 million
bond and $970 million (€900 million) subordinated notes together with
repayments on existing bonds of $262 million and subordinated notes of $558
million. Further, the RCF drawdown of $250 million as at 31 December 2024 was
repaid such that at period end the facility was undrawn.
Shareholder distributions consist of dividends paid of $228 million (H1 2024:
$100 million) and $38 million was paid to subordinated notes holders.
Cash and cash equivalent balances were $2,711 million (31 Dec 2024: $805
million) at the end of the period.
Capital investment is shown in the table below and is defined as additions to
property, plant and equipment, fixtures and fittings and intangible
exploration and evaluation assets, excluding changes to decommissioning
assets.
Six months ended 30 June 2025 2024
$ million Unaudited $ million Unaudited
Additions to oil and gas assets (774) (301)
Additions to fixtures and fittings, office equipment & IT software (26) (27)
Additions to exploration and evaluation assets (120) (121)
Additions to other intangible assets (23) (13)
Total capital investment(1) (943) (462)
Movements in working capital (64) 81
Capitalised interest 18 4
Capitalised lease payments 29 28
Cash capital investment per the cash flow statement (960) (349)
(1) Alternative performance measure - see Glossary for the definition.
Reconciliations between adjusted performance measures and reported measures
are provided within the Glossary.
During the period, the Group incurred total capital expenditure of $1,123
million (H1 2024: $587 million), split by capital investment $943 million (H1
2024: $462 million) and decommissioning spend $180 million (H1 2024: $125
million).
The capital investment was concentrated around our existing production hubs,
predominantly in Norway, the UK and Argentina. For further detail see section
above 'Maximising value from our producing assets'.
Post balance sheet events
On 9 July Harbour completed the disposal of the Vietnam business to EnQuest
plc for a headline value of $85 million with an effective date of 1 January
2024.
On 11 July 2025, the German Federal Council passed legislation mandating
annual 1 per cent reductions in the Federal Corporate Income Tax rate starting
from 2028 through to 2032. Including Trade Tax, Germany's headline tax rate is
expected to reduce from approximately 32 per cent to an estimated 27 per
cent. As the legislation was not substantively enacted at the balance sheet
date, its effects have not been reflected in the results for the period. If
enacted, it would have reduced the Group's deferred tax liability by an
estimated $66 million.
In prior periods, the Group disclosed a contingent liability, estimated at up
to $137 million as at 30 June 2025, in certain UK subsidiaries in respect of
an uncertain tax position related to the fair value movements and realised
gains and losses on derivative instruments entered into to hedge commodity
price risk. In the first half of 2025, HMRC completed a thorough review of
this matter and, subsequent to 30 June, confirmed that the Group's filed tax
position requires no adjustments. Consequently, the uncertainty has been
resolved and no financial impact results from this resolution, as no liability
was recognised in prior periods.
The Board approved a share buyback programme of the Company's voting ordinary
shares for up to a maximum aggregate consideration of $100 million. The
purpose of the programme is to reduce the Company's share capital and all
ordinary shares purchased as part of this programme will be cancelled. The
programme will commence on 8 August 2025, and will end no later than 31 March
2026.
Going concern
The results have been presented on a going concern basis. Detail of the
Group's assessment of going concern for the period can be found within note 2
to the financial statements.
Business risks
Harbour faces various risks that could result in events or circumstances that
might negatively impact the company's business model, its future performance,
liquidity, and reputation. Not all these risks are wholly within the company's
control and the company may also be affected by risks which have not yet
materialised or are not reasonably foreseeable.
The effective management of risk is critical if we are to continue to
successfully execute the strategy and to protect our personnel, assets, the
communities with whom we interact, and our reputation.
For known risks facing the business, the company seeks to reduce the
likelihood and mitigate the impact of the risk to within the level of appetite
or tolerance set by the Board. According to the nature of the risk, the
company can choose to take or tolerate risk, treat risk with mitigating
actions, transfer risk to third parties, or terminate risk by ceasing
particular activities or operations. In particular, the company has a zero
tolerance stance to fraud, bribery, corruption, and the facilitation of tax
evasion. We also aim to manage health, safety, and environmental and security
risks to a level as low as reasonably practicable.
Principal risks at half-year 2025 and key changes since the 2024 Annual Report
The directors have reviewed the principal risks facing the company and
concluded for the remaining six months of the financial year there are no
significant changes to the headline principal risks from those disclosed in
the 2024 Annual Report and Accounts. In conducting their review, the directors
noted an increase in global geopolitical uncertainty over the period and so
have amended the fourth principal risk headline below to recognise political
and fiscal risks whether they emanate from host countries or from others.
To reach this conclusion, the directors considered the changes in the external
environment during the recent period that could threaten the company's
business model, future performance, liquidity, and reputation. The directors
also considered management's view of the current risks facing the company.
A full description of Harbour's principal risks can be found on pages 64 to 69
of the 2024 Annual Report and Accounts.
The principal risks are now summarised as:
§ Execution of the strategy: failure to effectively implement the strategy
§ Health, safety and environment: risk of a major health, safety,
environmental or physical security incident
§ Organisation and talent: failure to create and maintain a cohesive
organisation with sufficient capability and capacity
§ Political and fiscal risks: exposure to adverse or uncertain political,
regulatory or fiscal developments
§ Operational performance: failure to deliver expected operational
performance
§ Capital programme and delivery: failure to deliver the capital programme as
planned
§ Third party reliance: failure to adequately manage joint venture partners,
third-party infrastructure owners, supply chain contractors and other partners
§ Financial discipline: failure to work within our financial framework to
implement the company's strategy
§ Commodity prices: exposure to the impact of commodity price fluctuations on
the business
§ Cyber and information security: failure to maintain safe, secure and
reliable information systems
§ Legal and regulatory compliance: failure to maintain and demonstrate
effective legal and regulatory compliance
§ Climate Change and Energy transition: failure to adapt the strategy in the
context of external expectations
§ Integration of acquired businesses: failure to integrate acquired
businesses as planned
Insurance
We have significant and appropriate insurance in place to minimise risk to our
operational and investment programmes. This includes business interruption
insurance.
Responsibility statement
The directors confirm that, to the best of their knowledge:
§ the condensed set of financial statements has been prepared in accordance
with UK-adopted IAS 34 'Interim Financial Reporting',
§ the half-yearly results statement includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the remaining
six months of the year), and
§ the half-yearly results statement includes a fair review of the information
required by DTR 4.2.8R (disclosure of related party transactions and changes
therein).
By order of the Board,
Alexander Krane
Director
6 August 2025
Disclaimer
This statement contains certain forward-looking statements that are subject to
the usual risk factors and uncertainties associated with the oil and gas
exploration and production business. Whilst Harbour believes the expectations
reflected herein to be reasonable in light of the information available to
them at this time, the actual outcome may be materially different owing to
factors beyond Harbour's control or within Harbour's control where, for
example, Harbour decides on a change of plan or strategy. Accordingly, no
reliance may be placed on the figures contained in such forward-looking
statements.
Financial Statements
Condensed consolidated income statement
For the six months ended 30 June 2025
Note 2025 2024
Unaudited Unaudited
$ million $ million
Revenue 4 5,181 1,906
Other operating income 4 90 10
Revenue and other operating income 5,271 1,916
Cost of operations 5 (2,721) (1,178)
Impairment of property, plant, and equipment 5 (186) (33)
Impairment of right-of-use assets 5 - (20)
Exploration and evaluation expenses and new ventures 5 (63) (22)
Exploration costs written off 10 (34) (17)
General and administrative costs 5 (246) (104)
Operating profit 2,021 542
Finance income 6 432 15
Finance expenses 6 (818) (165)
Profit before taxation 1,635 392
Income tax expense 7 (1,809) (335)
(Loss)/profit for the period after taxation (174) 57
(Loss)/profit for the period attributable to:
Equity owners of the company (207) 57
Subordinated notes investors 33 -
(174) 57
(Loss)/earnings per share Note $ cents $ cents
Basic
Ordinary shares voting 8 (12) 7
Ordinary shares non-voting 8 (14) -
Diluted
Ordinary shares voting 8 (12) 7
Ordinary shares non-voting 8 (14) -
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2025
2025 2024
Unaudited Unaudited
$ million $ million
(Loss)/profit for the period after taxation (174) 57
Other comprehensive income/(loss)
Items that will not be subsequently reclassified to income statement:
Actuarial gains 6 -
Tax expense on actuarial gains (3) -
Net other comprehensive income that will not be subsequently reclassified to 3
income statement
-
Items that may be subsequently reclassified to income statement:
Fair value gains/(losses) on cash flow hedges 1,103 (85)
Tax (expense)/credit on cash flow hedges (725) 64
Exchange differences on translation (191) (20)
Net other comprehensive income/(loss) that may be subsequently reclassified to 187
income statement
(41)
Other comprehensive income/(loss) for the period, net of tax 190 (41)
Total comprehensive income for the period, net of tax 16 16
Total comprehensive (loss)/income attributable to:
Equity owners of the company (17) 16
Subordinated notes investors 33 -
Total comprehensive income for the period, net of tax 16 16
Condensed consolidated balance sheet
As at 30 June 2025 Note 30 June 2025 Unaudited 31 Dec 2024 Audited
$ million $ million
Assets
Non-current assets
Goodwill 9 5,141 5,147
Other intangible assets 10 5,869 5,714
Property, plant and equipment 11 14,314 14,543
Right-of-use assets 12 550 656
Equity accounted investments 4 -
Deferred tax assets 7 147 130
Other receivables 201 176
Other financial assets 17 252 44
Total non-current assets 26,478 26,410
Current assets
Inventories 388 368
Trade and other receivables 2,260 2,316
Other financial assets 17 530 145
Cash and cash equivalents 2,711 805
5,889 3,634
Assets held for sale 14 224 277
Total current assets 6,113 3,911
Total assets 32,591 30,321
Equity and liabilities
Equity
Share capital 171 171
Merger reserve 3,728 3,728
Other reserves 18 169 (18)
Retained earnings 399 807
Equity attributable to equity holders of the company 4,467 4,688
Equity attributable to subordinated notes investors 1,970 1,563
Total equity 6,437 6,251
Non-current liabilities
Borrowings 16 5,138 4,215
Provisions 15 7,338 7,024
Deferred tax 7 6,885 6,221
Trade and other payables 85 30
Lease creditor 12 494 551
Other financial liabilities 17 88 415
Total non-current liabilities 20,028 18,456
Current liabilities
Trade and other payables 1,865 1,755
Borrowings 16 1,171 1,014
Lease creditor 12 207 241
Provisions 15 522 497
Current tax liabilities 2,134 1,412
Other financial liabilities 17 28 462
5,927 5,381
Liabilities directly associated with the assets held for sale 14 199 233
Total current liabilities 6,126 5,614
Total liabilities 26,154 24,070
Total equity and liabilities 32,591 30,321
The notes 1 to 22 form an integral part of these condensed consolidated
half-year financial statements
Consolidated statement of changes in equity
For the six months ended 30 June 2025
Share capital Merger reserve Other reserves (note 18) Retained earnings Equity attributable to owners of the company Equity attributable to subordinated notes investors Total
$ million $ million $ million $ million $ million $ million equity
$ million
At 1 January 2024 (Audited) 171 271 18 1,093 1,553 - 1,553
Profit for the period - - - 57 57 - 57
Other comprehensive loss - - (41) - (41) - (41)
Total comprehensive income - - (41) 57 16 - 16
Share-based payments - - - 25 25 - 25
Purchase of ESOP Trust Shares - - - (20) (20) - (20)
Dividend paid - - - (100) (100) - (100)
At 30 June 2024 (Unaudited) 171 271 (23) 1,055 1,474 - 1,474
At 1 January 2025 (Audited) 171 3,728 (18) 807 4,688 1,563 6,251
(Loss)/profit for the period - - - (207) (207) 33 (174)
Other comprehensive income - - 187 3 190 - 190
Total comprehensive income - - 187 (204) (17) 33 16
Share-based payments - - - 24 24 - 24
Dividend paid - - - (228) (228) - (228)
Distributions to subordinated notes investors - - - - - (38) (38)
Issuance of subordinated notes - - - - - 970 970
Repayment of subordinated notes - - - - - (558) (558)
At 30 June 2025 (Unaudited) 171 3,728 169 399 4,467 1,970 6,437
Condensed consolidated statement of cash flows
For the six months ended 30 June 2025
Note 2025 2024
Unaudited
Unaudited
$ million $ million
Net cash flows from operating activities 19 2,446 953
Investing activities
Expenditure on exploration and evaluation assets (185) (113)
Expenditure on property, plant and equipment (724) (199)
Expenditure on other intangible assets (23) (24)
Expenditure of non-oil and gas intangible assets (28) (13)
Finance income received 71 15
Acquisition of subsidiaries, net receipt 16 -
Other receipts 5 5
Net cash flows used in investing activities (868) (329)
Financing activities
Proceeds from bond issuance net of transaction costs 894 -
Proceeds from subordinated notes net of transaction costs 970 -
Proceeds from new borrowings - reserve based lending facility - 178
Proceeds from new borrowings - revolving credit facility 220 -
Payments towards principal portion of lease liabilities (133) (128)
Interest paid on lease liabilities (22) (26)
Repayment of bonds (262) -
Repayment of subordinated notes (558) -
Repayment of reserve based lending facility - (178)
Repayment of revolving credit facility (470) -
Repayment of financing arrangement - (10)
Purchase of ESOP Trust shares - (20)
Interest paid and bank charges (47) (87)
Dividends paid (228) (100)
Distributions paid to subordinated notes investors (38) -
Net cash flows from financing activities 326 (371)
Net increase in cash and cash equivalents 1,904 253
Net foreign exchange difference (2) -
Reclassification of change in Vietnam cash as asset held for sale 4 -
Cash and cash equivalents at 1 January 805 286
Cash and cash equivalents at 30 June 2,711 539
Notes to the half-year condensed consolidated financial statements
1. General information
Harbour Energy plc is a limited liability company incorporated in Scotland and
listed on the London Stock Exchange. The address of the registered office is
4th Floor, Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2EN, United
Kingdom.
The condensed consolidated financial statements of Harbour Energy plc
(Harbour) for the six months ended 30 June 2025 comprise the parent company,
Harbour Energy plc (the company), and all its subsidiaries (the Group), and
were approved and authorised for issuance by the board of directors on 6
August 2025.
The Group's principal activities are the acquisition, exploration, development
and production of oil and gas reserves in Norway, the UK, Germany, Mexico,
Argentina, North Africa and Southeast Asia.
The condensed and consolidated financial information contained in this report
is unaudited. The income statement, statement of comprehensive income,
statement of changes in equity and the cash flow statement for the six months
to 30 June 2025, and the balance sheet as at 30 June 2025 and related notes,
have been reviewed by the auditors.
2. Basis of preparation and changes to the Group's accounting policies
2.1 Basis of preparation
The half-year condensed consolidated financial statements (the Financial
Statements) for the six months ended 30 June 2025 have been prepared in
accordance with UK-adopted IAS 34 Interim Financial Reporting and the
Disclosure Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority. These half-year condensed financial statements are to be
read in conjunction with Harbour's Annual Report and Accounts for the year
ended 31 December 2024, which contains additional accounting policy
disclosures and information as required in a set of annual financial
statements.
The financial statements do not include all the information required for a
full annual report and do not constitute statutory financial statements within
the meaning of section 434 of the Companies Act 2006. The financial
information for the year ended 31 December 2024 has been extracted from the
consolidated financial statements of Harbour Energy plc for the year ended 31
December 2024 which were approved by the directors on 5 March 2025 and were
delivered to the Registrar of Companies. The auditor's report on those
financial statements was unqualified and did not contain a statement under
section 498 of the Companies Act 2006.
The financial statements have been prepared on the historical-cost basis,
except for certain financial assets and liabilities, including derivative
financial instruments, which have been measured at fair value.
The presentation currency of the Group financial information is US dollars and
all values in the Group financial information are presented in millions ($
million) and all values are to the nearest $1 million, except where otherwise
stated.
2.2 Going concern
The Directors considered the going concern assessment period to be up to 31
December 2026. The Group monitors and manages its capital position and its
liquidity risk regularly to ensure that it has access to sufficient funds to
meet forecast cash requirements. Cash forecasts for management are regularly
produced and sensitivities considered based on, but not limited to, the
Group's latest board approved life of field production and expenditure
forecasts, management's best estimate of future commodity prices based on
recent forward curves, adjusted for the Group's borrowing facilities.
The Group's ongoing capital requirements are financed by its $3.0 billion RCF,
bonds of $6.3 billion, subordinated notes of $2.0 billion and surety bonds of
$0.7 billion which provide cover for decommissioning securities. The RCF is
subject to financial covenants that require the ratio of consolidated total
net debt, including Letters of Credit, to last twelve months (LTM) EBITDAX to
be less than 3.5x and LTM EBITDA divided by interest expense to exceed 3.5x.
Under the Group's base case, the RCF is forecast to have an undrawn balance of
$2.2 billion at the end of 2026 which provides a robust liquidity position.
The base case indicates that the Group is able to operate as a going concern
with sufficient headroom and remain in compliance with its loan covenants
throughout the assessment period.
The Group's going concern assessment is based on management's best estimate of
forward commodity price curves and other economic assumptions, production and
expenditure in line with approved asset base case, plus the ongoing capital
requirements of the Group that will be financed by free cash flow, the
existing RCF and bond financing arrangements.
In line with the principal risks that have been identified which have the
greatest impact on the financial capability of the Group to operate as going
concern, a single downside sensitivity scenario has been prepared reflecting a
reduction in:
§ oil and gas prices of 20 per cent, and
§ the Group's unhedged production of 10 per cent throughout the entire
assessment period.
Management considers this represents a severe but plausible downside scenario
appropriate for assessing going concern.
In this downside scenario when applied to the base case forecast, the Group is
forecast to have sufficient liquidity headroom throughout the assessment
period and to remain in compliance with its financial covenants.
Reverse stress tests have been prepared reflecting reductions in each of
commodity price and production parameters, prior to any mitigation strategies,
to determine at what levels each would need to reach such that either the
lending covenants are breached or liquidity headroom runs out. The results of
these reverse stress tests demonstrated the likelihood that a sustained
significant fall in commodity prices or a significant fall in production over
the assessment period that would be required to cause a risk of funds
shortfall or a covenant breach is remote.
Taking the above analysis into account, the Board was satisfied that, for the
assessment period, the Group can maintain adequate liquidity and comply with
its lending covenants up to 31 December 2026 and therefore has adopted the
going concern basis for preparing the half-year condensed consolidated
financial statements.
2.3 Accounting policies, new standards, interpretations and amendments
adopted by the Group
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those adopted and
disclosed in Harbour's 2024 Annual Report and Accounts, except for the
adoption of new standards effective as of 1 January 2025 in the UK. The Group
has not early adopted any standard, interpretation or amendment that has been
issued but is not yet effective.
One amendment applies for the first time in 2025 and is effective for the
period beginning 1 January 2025 but does not have material impact on the
interim condensed consolidated financial statements of the Group.
Lack of exchangeability - Amendments to IAS 21
The amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates'
specify how companies should assess whether a currency is exchangeable and how
it should determine a spot exchange rate when exchangeability is lacking. The
amendments also require disclosure of information that enables users of its
financial statements to understand how the currency not being exchangeable
into the other currency affects, or is expected to affect, the entity's
financial performance, financial position and cash flows.
2.4 Use of judgements and estimates
In preparing these Financial Statements, management has made judgements and
estimates that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. Actual results may
differ from these estimates.
The significant judgements made by management in applying the Group's
accounting policies, and the key sources of estimation uncertainty, were the
same as those described on pages 136-137 of Harbour's 2024 Annual Report and
Accounts.
3. Segment information
The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the Group's business segments, has been
identified as the Chief Executive Officer.
The Group's activities consisted of one class of business being the
acquisition, exploration, development and production of oil and gas reserves
and related activities, are split geographically and managed in nine business
units: namely Norway, UK, Germany, Mexico, Argentina, North Africa, Southeast
Asia, CCS and Corporate. The CCS segment includes Denmark.
Six months ended Norway UK Germany Mexico Argentina North Southeast Asia CCS Corporate Total segments Adjustments and eliminations Consolidated
Africa
30 June 2025 (Unaudited) $ million $ million $ million $ million $ million
$ million $ million $ million $ million $ million $ million
$ million
Revenue and other operating income
External customers
- Crude oil sales 442 58 221 75 30 23 46 - 901 1,796 - 1,796
- Gas sales 103 - 7 5 215 79 48 - 2,627 3,084 - 3,084
- Condensate sales 148 38 1 - 10 24 - - 46 267 - 267
- Other revenue 10 23 1 - - - - - - 34 - 34
Other operating income - 17 1 2 26 43 - - 1 90 - 90
Inter-segment 1,496 1,893 136 - - - - - 199 3,724 (3,724) -
Total revenue and 2,199 2,029 367 82 281 169 94 - 3,774 8,995 (3,724) 5,271
other operating income
Cost of operations (761) (1,227) (286) (54) (198) (97) (48) (9) (3,765) (6,445) 3,724 (2,721)
impairment of property, plant and equipment - (140) (5) - - - (35) (6) - (186) - (186)
Impairment of right-of-use asset - - - - - - - - - - - -
Exploration and evaluation expenses and new ventures (4) (5) - (1) - - - (53) - (63) - (63)
Exploration costs written-off (34) - - - - - - - - (34) - (34)
General and administrative expenses (22) (2) (37) (13) (13) (12) (2) - (145) (246) - (246)
Segment operating profit/(loss) 1,378 655 39 14 70 60 9 (68) (136) 2,021 - 2,021
Finance income 432
Finance expenses (818)
Income tax expense (1,809)
Loss for the year (174)
Total capital additions 409 243 48 43 82 46 24 8 40 943 - 943
Total depreciation, depletion and amortisation 475 729 128 18 101 62 13 - 18 1,544 - 1,544
As at 30 June 2025 (Unaudited)
Total assets 9,541 6,845 3,295 2,457 4,510 921 870 16 4,136 32,591 - 32,591
Total liabilities (6,774) (7,668) (2,151) (468) (1,239) (155) (405) (122) (7,172) (26,154) - (26,154)
Six months ended Norway UK Germany Mexico Argentina North Southeast Asia CCS Corporate Total segments Adjustments and eliminations Consolidated
Africa
30 June 2024 (Unaudited) $ million $ million $ million $ million $ million
$ million $ million $ million $ million $ million $ million
$ million
Revenue and other operating income
External customers
- Crude oil sales - 1,043 - - - - 71 - - 1,114 - 1,114
- Gas sales - 635 - - - - 54 - 3 692 - 692
- Condensate sales - 81 - - - - - - - 81 - 81
- Other revenue - 19 - - - - - - - 19 - 19
Other operating income - 10 - - - - - - - 10 - 10
Inter-segment - - - - - - - - 48 48 (48) -
Total revenue and - 1,788 - - - - 125 - 51 1,964 (48) 1,916
other operating income
Cost of operations 1 (1,101) - - - - (84) - (42) (1,226) 48 (1,178)
Impairment of property, plant and equipment - (33) - - - - - - - (33) - (33)
Impairment of right-of-use asset - (20) - - - - - - - (20) - (20)
Exploration and evaluation expenses and new ventures (3) (6) - - - - - (13) - (22) - (22)
Exploration costs written-off (3) - - (1) - - (13) - - (17) - (17)
General and administrative expenses - (3) - - - - (1) - (100) (104) - (104)
Segment operating (loss)/ profit (5) 625 - (1) - - 27 (13) (91) 542 - 542
Finance income 15
Finance expenses (165)
Income tax expense (335)
Profit for the year 57
Total capital additions 36 334 - 8 - - 57 - 27 462 - 462
Total depreciation, depletion and amortisation - 530 - - - - 39 - 13 582 - 582
As at 31 December 2024 (Audited)
Total assets 9,434 7,306 3,042 2,420 4,488 917 919 18 1,777 30,321 - 30,321
Total liabilities (6,622) (6,936) (1,965) (482) (1,292) (165) (454) (108) (6,046) (24,070) - (24,070)
4. Revenue from contracts with customers and other operating income
Six months ended 30 June 2025 2024
Unaudited Unaudited
$ million $ million
Type of goods
Crude oil sales 1,796 1,114
Gas sales 3,084 692
Condensate sales 267 81
Total revenue from contracts with customers(1) 5,147 1,887
Tariff income 25 16
Other revenue 9 3
Revenue from production activities 5,181 1,906
Other operating income 90 10
Total revenue and other operating income 5,271 1,916
(1) Revenues from contracts with customers of $5,175 million (H1 2024:
$1,942 million) include crude oil sales of $1,761 million (H1 2024: $1,113
million) and gas sales of $3,147 million (H1 2024: $748 million). This was
prior to realised hedging gains in the period of $35 million (H1 2024: $1
million) on crude oil and realised hedging losses of $63 million (H1 2024: $56
million) on gas sales.
5. Operating profit
Six months ended 30 June Note 2025 2024
Unaudited Unaudited
$ million $ million
Cost of operations
Production, insurance and transportation costs 1,142 561
Commodity purchases 49 5
Royalties 74 3
Impairment of receivables 28 -
Depreciation of oil and gas assets 11 1,438 466
Depreciation of right-of-use oil and gas assets 12 120 137
Capitalisation of IFRS 16 lease depreciation on oil and gas assets 12 (39) (38)
Movement in over/underlift balances and hydrocarbon inventories (91) 44
Total cost of operations 2,721 1,178
Impairment expense of property, plant and equipment(2) 11,14 155 49
Net impairment loss/(gain) due to decrease in decommissioning provisions on 11,15 31 (16)
oil and gas tangible assets
Impairment expense of right-of-use assets 12 - 20
Exploration costs written-off(1) 10 34 17
Exploration and evaluation expenditure and new ventures(1) 63 22
General and administrative expenses
Depreciation of right-of-use non-oil and gas assets 12 8 6
Depreciation of non-oil and gas assets 11 7 2
Amortisation of non-oil and gas intangible assets 10 10 9
Acquisition-related transaction costs 3 -
Other administrative costs 218 87
Total general and administrative expenses 246 104
(1) During the period, the Group expensed $97 million (H1 2024: $39
million) of exploration and appraisal activities. This covers exploration
write-off expenses of $34 million including $22 million related to the Skarv
CO₂ Emission Reduction Project (note 10), $7m related to the Njargasas well
and also includes costs associated with licence relinquishments in Norway
(note 10) (H1 2024: $17 million). Exploration and evaluation expenditure
includes $43 million related to the CCS Havstjerne well.
(2) Impairment consists of a pre-tax impairment charge of tangible oil and
gas assets (note 11) of $121 million across four CGUs in the UK driven
primarily by a reduction in the short-term commodity price outlook compared to
the 2024 year-end view, and a pre-tax impairment of $34 million ($24 million
post-tax) relating to the Vietnam sale (note 14).
6. Finance income and finance expenses
Six months ended 30 June Note 2025 2024
Unaudited Unaudited
$ million $ million
Finance income
Bank interest 49 8
Other interest and finance gains 22 5
Lease finance income 1 1
Realised gains on foreign exchange forward contracts 213 1
Unrealised gains on derivatives(1) 83 -
Gain on financial instruments for contingent consideration 12 -
Derivative ineffectiveness 40 -
Dividend income from investments 12 -
Total finance income 432 15
Finance expenses
Interest payable on reserves-based lending - 1
Interest payable on revolving credit facility 3 -
Interest payable on bonds 82 14
Other interest and finance expenses 9 2
Lease interest 12 22 26
Losses on derivatives(1) - 6
Foreign exchange losses(2) 504 5
Bank and financing fees(3) 71 23
Unwinding of discount on decommissioning and other provisions 15 145 92
836 169
Finance costs capitalised during the period(4) (18) (4)
Total finance expense 818 165
(1) Gains on derivatives in H1 2025 relate to changes in the fair value of
an embedded derivative within one of the Group's gas contracts of $18 million
(H1 2024: $2 million loss), and mark to market gains on unrealised foreign
exchange derivatives of $65 million (H1 2024: $4 million loss).
(2) Foreign exchange losses arise mainly due to revaluation of UK and
Norwegian current tax liabilities ($230 million, H1 2024: $2 million gain) and
intercompany balances in non-US dollar functional currency subsidiaries ($193
million, H1 2024: $13 million gain).
(3) Bank and financing fees include an amount of $42 million (H1 2024: $10
million) relating to the amortisation of arrangement fees and related costs
capitalised against the Group's long-term borrowings (note 16).
(4) The amount of finance costs capitalised was determined by applying the
weighted average rate of finance costs applicable to the borrowings of the
Group of 4.3 per cent to the expenditures on the qualifying assets (H1 2024:
5.7 per cent). Capitalised finance costs are included within property, plant
and equipment additions (note 11).
7. Income tax
The major components of income tax expense for the six months ended 30 June
2025 and 2024 are:
Six months ended 30 June 2025 2024
Unaudited Unaudited
$ million $ million
Current income tax expense:
Charge for the period(1) 1,996 228
Adjustment in respect of prior years 7 (2)
Total current income tax expense 2,003 226
Deferred tax expense:
Origination and reversal of temporary differences(2) (204) 112
Adjustment in respect of prior years 10 (3)
Total deferred tax (credit)/expense (194) 109
Total tax expense reported in the income statement 1,809 335
The tax (expense)/credit in the statement of comprehensive income is as
follows:
Tax (expense)/credit on cash flow hedges (725) 64
Tax expense on cash actuarial gains (3) -
Total tax (expense)/credit reported in the statement of comprehensive income (728) 64
(1) The amount disclosed in 2024 now includes overseas current tax of $1
million previously separately disclosed
(2) The amount disclosed in 2024 now includes overseas deferred tax of $4
million previously separately disclosed
The effective tax rate for the six months ended 30 June 2025 was 111 per cent,
compared to 85 per cent for the same period in 2024. The increase is primarily
due to a $311 million deferred tax charge arising from the extension of the
Energy Profits Levy (EPL) in the UK by two years, from 31 March 2028 to 31
March 2030, as well as non-deductible foreign exchange losses.
The tax expense has been computed by considering the estimated annual average
expected tax rate for the year, for each jurisdiction based on enacted or
substantively enacted rates at the end of the half-year period.
Change in tax rates
The future effective tax rate is influenced by the profit mix across the
jurisdictions in which the Group operates. The UK and Norway are expected to
remain the principal sources of profit, and as such, their statutory tax rates
for oil and gas production of 78 per cent are anticipated to continue to be
the primary drivers of the Group's future tax expense.
The extension of the EPL by the UK government from 31 March 2028 to 31 March
2030 was substantively enacted on 3 March 2025 and the associated $311 million
increase in deferred tax liabilities has been recognised in this period's
financial statements.
On 11 July 2025, the German Federal Council passed legislation mandating
annual 1 per cent reductions in the Federal Corporate Income Tax rate starting
from 2028 through to 2032. Including Trade Tax, Germany's headline tax rate is
expected to reduce from approximately 32 per cent to an estimated 27 per
cent. As the legislation was not substantively enacted at the balance sheet
date, its effects have not been reflected in the results for the period. If
enacted, it would have reduced the Group's deferred tax liability by an
estimated $66 million.
Deferred tax
The principal components of deferred tax are set out in the following tables:
30 June 2025 31 Dec 2024
Unaudited Audited
$ million $ million
Deferred tax assets 147 130
Deferred tax liabilities (6,893) (6,240)
(6,746) (6,110)
Reclassification of deferred tax liabilities directly associated with assets 8 19
held for sale
Total deferred tax (6,738) (6,091)
The presentation above reflects the offsetting of deferred tax assets and
deferred tax liabilities within the same tax jurisdiction (where this is
permitted). The overall deferred tax balance in a jurisdiction determines if
the deferred tax related to that jurisdiction is disclosed within deferred tax
assets or deferred tax liabilities.
The origination of and reversal of temporary differences are, as shown in the
next table, primarily related to movements in the carrying amounts and tax
base values of expenditure, and the timing of when these items are charged or
credited against accounting and taxable profit.
Accelerated capital Decom-missioning Losses Fair Other Overseas Total
value of derivatives
allowances $ million $ million
$ million $ million $ million
$ million
$ million
As at 1 January 2024 (Audited) (2,901) 1,574 181 6 21 (171) (1,290)
Deferred tax (expense)/credit -
(44) 257 (114) (38) 42 103
Comprehensive expense - - - 380 4 - 384
Other reserves(1) - - - - (1) - (1)
Additions from business combinations -
(6,509) 971 201 (14) (2) (5,353)
Reclassifications(2) (221) 7 28 - 15 171 -
Foreign exchange 75 (18) (8) 2 (4) - 47
As at 31 December 2024 (Audited) (9,600) 2,791 288 336 75 - (6,110)
Deferred tax credit/(expense) 172 15 (46) 29 24 - 194
Comprehensive expense - - - (725) (3) - (728)
Income statement reserves - - - - - - -
Foreign exchange (192) 83 7 (5) 5 (102)
As at 30 June 2025 (Unaudited) (9,620) 2,889 249 (365) 101 - (6,746)
(1) Movement in other reserves relates to the element of deferred tax on UK
share-based payments taken to profit and loss reserves.
(2) In 2024, items previously classified as overseas balances in 2023 were
reclassified into specific deferred tax categories.
The Group's deferred tax assets are recognised to the extent that taxable
profits are expected to arise against which the tax assets can be utilised.
The Group assessed the recoverability of tax losses and allowances using
corporate assumptions which are consistent with the Group's impairment
assessment. Based on those assumptions, the Group expects to fully utilise its
recognised tax losses and allowances. The recovery of the Group's UK
decommissioning deferred tax asset is additionally supported by the ability to
carry back decommissioning tax losses and set these against ring fence taxable
profits of prior periods.
In the UK, ring fence tax losses cannot be offset against profits subject to
EPL nor are deductions allowed for decommissioning related expenditure.
Consequently, any deferred tax assets representing future decommissioning
deductions or ring fence tax losses are unaffected by the EPL. The primary
impact of the EPL is on the deferred tax liability associated with accelerated
capital allowances. The closing deferred tax liability for the period is
$6,746 million (Dec 2024: $6,110 million), of which $1,216 million (Dec 2024:
$877 million) relates to deferred tax liabilities arising from the impact of
the EPL.
Unrecognised tax losses and allowances
Deferred tax assets are recognised for tax loss carry forwards, tax allowances
and other deductible temporary differences to the extent that it is probable
the associated tax benefits will be realised through offsetting future taxable
profits or by carrying losses back to prior periods' profits. At the end of
the accounting period, the Group had not recognised deferred tax assets for
tax losses, allowances and other deductible temporary differences amounting to
approximately $3,246 million (Dec 2024: $2,743 million). These other
deductible temporary differences include unclaimed tax depreciation and
allowances $321 million (Dec 2024: $223 million), unrealised losses on
non-commodity derivatives $nil million (Dec 2024: $109 million), and
decommissioning related provisions $246 million (Dec 2024: $73 million).
30 June 31 December 2024
2025
Unaudited Audited
$ million $ million
Tax losses by expiry date
Expiring within 5 years 480 477
Expiring within 6-10 years 400 240
No expiration 1,799 1,621
2,679 2,338
Other deductible temporary differences and allowances 567 405
Total unrecognised tax losses and allowances · 3,246 2,743
As at 30 June 2025, no deferred tax liabilities were recognised for temporary
differences associated with investments in subsidiaries, branches and
associates of approximately $343 million (Dec 2024: $293 million) because the
Group is in a position to control the timing of the reversal of the temporary
differences and it is probable that such differences will not reverse in the
foreseeable future.
Global minimum corporation tax rate - Pillar Two requirements
The legislation implementing the Organisation for Economic Co-operation and
Development's ('OECD') proposals for a global minimum corporation tax rate
('Pillar 2') was substantively enacted into UK law on 20 June 2023. The rules
have effect from 1 January 2024.
The Group has applied the mandatory exception in IAS 12 to recognising and
disclosing information about deferred tax assets and liabilities related to
Pillar Two income taxes.
The Group has performed an assessment of its potential exposure to Pillar Two
income taxes for periods from 1 January 2024 using the most recent tax
filings, country-by-country reports and financial statements of Group
entities. The assessment indicates that effective tax rates in most
jurisdictions where the Group operates exceed the 15 per cent threshold, and
transitional safe harbour relief is expected to apply. Accordingly, the Group
does not expect a material exposure to Pillar Two income taxes in any
jurisdictions, though this position remains under ongoing review.
Uncertain tax positions
The Group considers an uncertain tax position to exist when it believes that
the amount of profit subject to tax in the future may exceed the amount
initially reflected in the Group's tax returns. The Group applies IFRIC 23
Uncertainty over Income Tax Treatments in relation to uncertain tax positions.
When management judges that an outflow of funds is probable and a reliable
estimate of the dispute can be made, a provision is recognised for the best
estimate of the most likely liability.
In estimating any such liability, the Group adopts a risk-based approach,
considering the specific circumstances of each dispute. This is based on
management's interpretation of tax law and, where appropriate, is supported by
independent specialist advice. These estimates are inherently judgemental and
can change significantly over time as disputes progress and new facts emerge.
Provisions are reviewed continuously. However, the resolution of tax issues
may take a long time to conclude, and there is a possibility that the amounts
ultimately paid could differ from the amounts initially provided.
In prior periods, the Group disclosed a contingent liability in respect of an
uncertain tax position arising within certain UK subsidiaries. The matter
related to the timing of taxation of fair value movements and realised gains
and losses on derivative instruments entered into to hedge commodity price
risk. Based on independent external tax advice, management concluded that an
outflow of economic benefits was not probable. Accordingly, no liability was
recognised in the Group's consolidated financial statements in previous
reporting periods.
The contingent liability, estimated at up to $137 million as at 30 June 2025,
was previously disclosed due to the possibility that HM Revenue & Customs
(HMRC) might apply a different tax treatment to these hedging transactions.
The potential exposure arose primarily from differences in applicable tax
rates over the relevant periods.
In the first half of 2025, HMRC completed a thorough review of this matter
and, subsequent to 30 June, confirmed that the Group's filed tax position
requires no adjustments. Consequently, the uncertainty has been resolved and
no financial impact results from this resolution, as no liability was
recognised in prior periods.
8. (Loss)/earnings per share
Basic EPS is calculated by dividing the (loss)/profit after tax attributable
to ordinary shareholders of the Group by the weighted average number of
ordinary shares in issue during the year.
Diluted EPS is calculated by dividing the (loss)/profit after tax attributable
to ordinary shareholders by the weighted average number of ordinary share in
issue during the year plus the weighted average number of ordinary shares that
would be issued on conversion of all the dilutive potential ordinary shares
into ordinary shares.
The following table reflects the income and share data used in the basic and
diluted EPS calculations:
Six months ended 30 June 2025 2024
Unaudited Unaudited
(Loss)/earnings for the period ($ millions)
(Loss)/earnings for the purpose of basic earnings per share (207) 57
Effect of dilutive potential ordinary shares - -
(Loss)/earnings for the purpose of diluted earnings per share (207) 57
Number of shares (millions)
Weighted average number of ordinary shares (voting) for the purposes of basic 1,440 770
earnings per share
Weighted average number of ordinary shares (non-voting) for the purposes of 284 -
basic earnings per share
Weighted average number of ordinary shares (voting) for the purposes of 1,440 4
diluted earnings per share
Weighted average number of ordinary shares (non-voting) for the purposes of 284 -
diluted earnings per share
(Loss)/earnings per share ($ cents)
Basic:
Ordinary shares voting (12) 7
Ordinary shares non-voting(1) (14) -
Diluted:
Ordinary shares voting (12) 7
Ordinary shares non-voting(1) (14) -
(1) Earnings per share for non-voting shares reflects the 13 per cent
incremental premium on this class of shares ( )
9. Goodwill
Goodwill represents the difference between the aggregate of the fair value of
purchase consideration transferred at the acquisition date and the fair value
of the identifiable assets.
30 June 2025 Unaudited 31 Dec 2024
$ million Audited
$ million
At 1 January 5,147 1,302
(Reductions)/additions from business combinations (6) 3,845
5,141 5,147
As discussed in note 13 on business combinations, following an adjustment to
cash consideration, the goodwill arising from the Wintershall Dea acquisition
has reduced by $6 million.
In accordance with IAS 36 Impairment of Assets, goodwill is reviewed for
impairment at the year-end, or more frequently, if there are indications that
goodwill might be impaired. The goodwill recognised in business combinations
is allocated to operating segments for the purpose of impairment testing. The
carrying value of goodwill is tested at the operating segment level against
the aggregated headroom arising from the impairment testing of corresponding
segment assets. The carrying value of the assets is the sum of tangible
assets, intangible assets and goodwill as of the assessment date. In the asset
impairment test performed, and where applicable, the carrying value is
adjusted by deferred tax. When the deferred tax liabilities from the
acquisitions naturally unwind and decrease, as a result of depreciation
through production, more goodwill is exposed to impairment. This may lead to
future impairment charges even though other assumptions remain stable.
For the purpose of its goodwill impairment assessments, the Group uses the
fair value less costs of disposal method (FVLCD) to calculate the recoverable
amount of the operating segments consistent with a level 3 fair value
measurement (see note 17). In determining the recoverable value, appropriate
discounted-cash-flow valuation models are used, incorporating market-based
assumptions. Management's commodity assumptions are discussed in note 11.
At 30 June 2025, due to the change in short-term commodity prices since year
end and the ongoing challenging fiscal and regulatory climate in the UK, the
Group tested the UK business unit goodwill for impairment in accordance with
the Group's accounting policy however no impairment was recognised (H1 2024:
nil).
10. Intangible assets
Oil and gas Non-oil and gas assets(2) Carbon allowances Total
$ million
assets $ million $ million
$ million
Cost
At 1 January 2025 (Audited) 5,545 181 65 5,791
Additions during the period 120 20 23 163
Utilised during the period - - (34) (34)
Transfer to property, plant and equipment (9) - - (9)
Exploration written-off(1) (34) - - (34)
Currency translation adjustment 62 19 7 88
At 30 June 2025 (Unaudited) 5,684 220 61 5,965
Amortisation
At 1 January 2025 (Audited) - 77 - 77
Charge for the period - 10 - 10
Currency translation adjustment - 9 - 9
At 30 June 2025 (Unaudited) - 96 - 96
Net book value
At 31 December 2024 (Audited) 5,545 104 65 5,714
At 30 June 2025 (Unaudited) 5,684 124 61 5,869
(1) The exploration write-off of $34 million includes $22 million related
to the cancellation of the Skarv CO₂ Emission Reduction Project, $7m related
to the Njargasas well and also includes costs associated with licence
relinquishments in Norway.
(2 )Non-oil and gas assets relate to Group IT software and carbon
capture and storage activities, mainly related to the Viking CCS project in
the UK.
11. Property, plant and equipment
Oil and gas Fixtures and fittings & office equipment Total
$ million
assets $ million Land and buildings
$ million $ million
Cost
At 1 January 2025 (Audited) 23,385 57 38 23,480
Additions 774 6 - 780
Increase in decommissioning asset(1) 67 - - 67
Transfer from intangible assets 9 - - 9
Disposals (3) (1) - (4)
Currency translation adjustment 792 6 5 803
At 30 June 2025 (Unaudited) 25,024 68 43 25,135
Depreciation
At 1 January 2025 (Audited) 8,927 9 1 8,937
Charge for the period 1,438 5 2 1,445
Net impairment charge(2) 152 - - 152
Disposals (3) - - (3)
Currency translation adjustment 289 1 - 290
At 30 June 2025 (Unaudited) 10,803 15 3 10,821
Net book value
At 31 December 2024 as restated (Audited) 14,458 48 37 14,543
At 30 June 2025 (Unaudited) 14,221 53 40 14,314
(1) An increase to decommissioning assets of $67 million (H1 2024: $49
million) was made during the period as a result of both new obligations and an
update to the decommissioning estimates (note 15).
(2) The current period net impairment charge of $152 million includes a
pre-tax impairment charge of $121 million across four CGUs in the UK driven
primarily by a reduction in the commodity price outlook compared to the 2024
year-end view, and $31 million was also recorded in respect of revised
decommissioning cost profiles for a number of the Group's non-producing assets
with no remaining net book value.
Impairment assessments
Assumptions involved in impairment measurement include estimates of commercial
reserves and production volumes, future oil and gas prices, discount rates and
the level and timing of expenditures, all of which are inherently uncertain.
For the purpose of its impairment assessments, the Group uses the fair value
less costs of disposal method (FVLCD) to calculate the recoverable amount of
the cash-generating units (CGU) consistent with a level 3 fair value
measurement (see note 17). In determining the recoverable value, appropriate
discounted-cash-flow valuation models are used, incorporating market-based
assumptions.
Management's commodity price curve assumptions used for the purposes of
management's impairment assessments are benchmarked against a range of
external forward price data on a regular basis. Individual field price
differentials are then applied. The first two and a half years are guided by
the market forward price curves, transitioning to a long-term price from 2028,
thereafter inflated at 2.5 per cent per annum. The long-term commodity prices
used were $75 per barrel for crude, $11/mscf for UK NBP gas and the European
gas price at 2 per cent higher than UK NBP.
12. Leases
Balance sheet
Right-of-use assets Land and buildings Drilling FPSO Offshore facilities Equipment Total
rigs
$ million
$ million
$ million $ million $ million
$ million
Cost
At 1 January 2025 (Audited) 194 411 557 360 59 1,581
Additions 3 - - - - 3
Cost revisions/remeasurements 1 (2) - - - (1)
Disposals (1) (127) - - - (128)
Currency translation adjustment 14 35 - - 4 53
At 30 June 2025 (Unaudited) 211 317 557 360 63 1,508
Accumulated depreciation
At 1 January 2025 (Audited) 62 255 352 226 30 925
Charge for the period 8 46 34 27 13 128
Disposals (1) (127) - - - (128)
Currency translation adjustment 8 23 2 - - 33
At 30 June 2025 (Unaudited) 77 197 388 253 43 958
Net book value
At 31 December 2024 (Audited) 132 156 205 134 29 656
At 30 June 2025 (Unaudited) 134 120 169 107 20 550
The significant portion of the Group's lease liabilities represent lease
arrangements for FPSO vessels and offshore facilities in the UK business unit.
The lease liabilities and associated right-of-use-assets have been calculated
by reference to in-substance fixed lease payments in the underlying agreements
incurred throughout the non-cancellable period of the lease along with periods
covered by options to extend the lease where the Group is reasonably certain
that such options will be exercised. When assessing whether extension options
were likely to be exercised, assumptions are consistent with those applied
when testing for impairment.
Lease liabilities Note 30 June 2025 Unaudited 31 Dec 2024 Audited
$ million $ million
At 1 January (Audited) 792 768
Additions 3 193
Additions from business combinations and joint arrangements - 118
Remeasurement (1) 67
Finance costs charged to income statement 6 22 53
Finance costs charged to decommissioning provision 1 1
Reclassification of liabilities as held for sale 9 (78)
Lease payments (155) (319)
Currency translation adjustment 30 (11)
701 792
Classified as:
Current 207 241
Non-current 494 551
Total lease liabilities 701 792
Income statement
Six months ended 30 June Note 2025 2024
Unaudited Unaudited
$ million $ million
Depreciation charge of right-of-use assets
Land and buildings - non-oil and gas assets 8 6
Drilling rigs 46 46
FPSO 34 46
Offshore facilities 27 42
Equipment 13 3
Depreciation charge 5 128 143
Capitalisation of IFRS 16 lease depreciation(1)
Drilling rigs (33) (37)
Equipment (6) (1)
Total depreciation charge 89 105
Lease interest 6 22 26
(1) Of the $39 million (H1 2024: $38 million) capitalised IFRS 16 lease
depreciation, $29 million (H1 2024: $28 million) has been capitalised within
property, plant and equipment and $10 million (H1 2024: $10 million) within
provisions (note 15).
The total cash outflow for leases in the first six-months of 2025 was $155
million (H1 2024: $154 million).
13. Business combinations
No business combinations occurred during the six months ended 30 June 2025.
Business combinations during the year ended 31 December 2024
On 3 September 2024, the Group closed the transaction to acquire substantially
all of Wintershall Dea's upstream assets from BASF and LetterOne, including
those in Norway, Germany, Denmark, Argentina, Mexico, Egypt, Libya and Algeria
as well as Wintershall Dea's CCS licences in Europe. The Group acquired the
portfolio as it significantly increased production capacity and provided
geographic diversification, adding high quality assets with material positions
in Norway, Germany, Argentina, North Africa and Mexico. It also strengthened
the Group's financial position, delivering investment grade credit ratings
post-transaction. The Group acquired control through the payment of cash and
issuance of shares to BASF and LetterOne.
The provisional fair value of identifiable net assets acquired was $2,994
million, and the fair value of the subordinated notes accounted for within
equity was $1,548 million. With the fair value of consideration of $5,291
million, this resulted in recognition of goodwill of $3,845 million. During
the current period, $16 million of cash consideration was repaid to the Group
following post-closing adjustments under the terms of the Business Combination
Agreement and is reflected in the condensed consolidated statement of cash
flows. Of this, $10 million had previously been notified and was reflected in
the goodwill recognised as at 31 December 2024. During the period, a further
$6 million was notified and repaid, resulting in a corresponding reduction in
goodwill, see note 9.
There have been no changes to the fair values of identifiable net assets
acquired. For more information on fair values the identifiable net assets,
refer to note 14 of the 2024 Annual Report and Accounts.
14. Assets held for sale
In December 2024, the Group entered into an exclusivity agreement to sell its
business in Vietnam, which holds 53.125 per cent interest the in Chim Sáo and
Dua producing fields, to EnQuest for a consideration of $85 million. The
transaction has an effective date of 1 January 2024. The assets and
liabilities of Vietnam have been classified as held for sale in the balance
sheet as at 30 June 2025, as the transaction completed on 9 July 2025.
The Group's Vietnam operations are included in the Southeast Asia segment,
previously International, however are not considered a major geographical area
or line of business and therefore the disposal has not been classified as
discontinued operations.
The major classes of assets and liabilities of the Group as held for sale as
at 30 June 2025 are as follows:
30 June 2025
Unaudited
$ million
Assets
Property, plant and equipment 39
Right-of-use assets 34
Other receivables and working capital 151
Assets held for sale 224
Liabilities
Provisions 92
Lease creditor 69
Trade and other payables 30
Deferred tax 8
Liabilities directly associated with assets held for sale 199
Net assets directly associated with disposal group 25
Impairment loss recorded, net of tax 24
The assets in the disposal group are held at the lower of their carrying
amount and fair value less costs to sell. As at 30 June 2025, a post-tax
impairment of $24 million was recognised as the fair value less cost to sell,
being the expected consideration adjusted for items agreed under the SPA, was
below the carrying amount of the disposal group. Following the impairment
charge the net assets directly associated with the disposal group held on the
consolidated balance sheet was $25 million.
15. Provisions
Decommissioning Employee obligation provision Onerous contract provision Other Total
$ million
provision Pension provision $ million $ million provisions
$ million $ million $ million
At 1 January 2025 (Audited) 7,114 46 68 35 258 7,521
Additions 30 - - - - 30
Changes in estimates - increase to oil and gas tangible decommissioning assets 6 - - - - 6
Changes in estimate on oil and gas tangible assets 31 - - - - 31
- debit to income statement
Changes in estimates - debit to income statement - - 7 24
3 14
Actuarial gains and losses - (7) - - - (7)
Amounts used (180) (6) (26) (1) (30) (243)
Reclassification of liabilities directly associated with assets held for sale (2) - - - - (2)
Interest on decommissioning lease (1) - - - - (1)
Depreciation, depletion and amortisation on decommissioning right-of-use (10) - - - - (10)
leased asset
Unwinding of discount 142 2 - 1 - 145
Currency translation adjustment 323 5 4 - 34 366
At 30 June 2025 (Unaudited) 7,453 43 60 35 269 7,860
Classified within:
Current liabilities 393 - 22 3 104 522
Non-current liabilities 7,060 43 38 32 165 7,338
Total provisions 7,453 43 60 35 269 7,860
The Group provides for the estimated future decommissioning costs on its oil
and gas assets at the balance sheet date. The payment dates of expected
decommissioning costs are uncertain and are based on economic assumptions of
the fields concerned. These estimated future decommissioning costs are
inflated at the Group's long term view of inflation of 2.5 per cent per annum
(H1 2024: 2.5 per cent per annum) and discounted at a risk-free rate of
between 4.1 per cent and 4.5 per cent (H1 2024: 4.3 per cent and 5.2 per cent)
reflecting a 6-month (H1 2024: 6-month) rolling average of market rates over
the varying lives of the assets to calculate the present value of the
decommissioning liabilities. The unwinding of the discount is presented within
finance costs.
Employee obligation provisions of $60 million relate to obligations to pay
long-service bonuses, anniversary bonuses, and variable remuneration,
including the associated social security contributions and provisions due to
early retirement as well as phased-in early retirement models. This includes a
termination benefit provision in Indonesia of $25 million (2024: $26 million),
where the Group operates a service, severance and compensation pay scheme
under a collective labour agreement with the local workforce.
The onerous contract provision of $35 million (2024: $nil) relates to work
programmes in Libya due to force majeure conditions in-country.
Other provisions at 30 June 2025 mainly includes a $140 million provision
related to a commercial settlement from 2019 on gas migration in Rehden,
Germany and a $52 million provision related to restructuring programmes within
Norway, Germany and Mexico.
16. Borrowings and facilities
The Group's borrowings are carried at amortised cost:
30 June 2025 31 Dec 2024
Unaudited Audited
$ million $ million
Bonds 6,309 5,011
Revolving credit facility - 218
Total borrowings 6,309 5,229
Classified within:
Non-current liabilities 5,138 4,215
Current liabilities 1,171 1,014
Total borrowings 6,309 5,229
Bonds
Nominal value Fair value Carrying value
€/$ million 30 June 25 30 June 25
$ million $ million
% Maturity Currency
Bond ISIN: XS2054209833 0.8 2025 EUR 1,000 1,174 1,171
Bond ISIN: US411618AB75/ USG4289TAA19 5.5 2026 USD 238 237 236
Bond ISIN: XS2054210252 1.3 2028 EUR 1,000 1,115 1,098
Bond ISIN: XS2908093805 3.8 2029 EUR 700 835 820
Bond ISIN: XS2055079904 1.8 2031 EUR 1,000 1,038 1,036
Bond ISIN: XS2908095172 4.4 2032 EUR 900 1,062 1,054
Bond ISIN: US411618AD32 / USG4289TAB91 6.3 2035 USD 900 891 894
In October 2021, Harbour Energy plc issued $500 million of 5.50 per cent
senior bonds due 2026. $262 million of these bonds were repaid in March 2025.
Under the terms of the business combination entered into between the company,
BASF and LetterOne in September 2024, three existing Wintershall Dea bonds
were ported to Harbour Energy on completion of the acquisition.
As at 30 June 2025, the fair value of these bonds, which is determined using
quoted market prices in an active market, amounts to $3,327 million. The
repayment obligation remains at €3,000 million ($3,536 million).
On 26 September 2024 Harbour announced that Wintershall Dea Finance B.V. as
issuer, a subsidiary of Harbour, priced an offering on 25 September 2024 of
€700 million in aggregate principal amount of 3.830 per cent senior bonds
due 2029 and €900 million in aggregate principal amount of 4.357 per cent
senior bonds due 2032. Harbour primarily used the proceeds from this offering
to repay and cancel the $1.5 billion bridge facility utilised for the
Wintershall Dea acquisition which completed on 3 September 2024.
On 24 March 2025, Harbour Energy plc priced an offering of $900 million of
6.327 per cent senior bonds due 2035. Harbour used the proceeds to finance the
purchase of $262 million of the $500 million 5.50 per cent senior bonds due
2026 and for general corporate purposes, including toward repayment of
upcoming debt maturities.
At the balance sheet date, the outstanding revolving credit facility balance,
excluding incremental arrangement fees, related costs and letters of credit,
was $nil (Dec 2024: $250 million). As at 30 June 2025, $2,392 million remained
available for drawdown under the RCF (Dec 2024: $1,854 million under the RCF
facility).
The Group has facilities to issue up to $1,750 million of letters of credit
(Dec 2024: $1,750 million), of which $608 million (Dec 2024: $871 million) was
in issue as at 30 June 2025, mainly in respect of future decommissioning
liabilities.
The carrying values on the balance sheet are stated net of the unamortised
portion of issue costs and bank fees of $250 million (Dec 2024: $284 million)
of which fees associated with the RCF were $nil (Dec 2024: $32 million), and
$250 million is netted against the bond (Dec 2024: $252 million).
Interest of $93 million on the bonds and RCF facilities (Dec 2024: $34
million) had accrued by the balance sheet date and has been classified within
accruals.
17. Other financial assets and liabilities
The Group held the following financial instruments at fair value at 30 June
2025.
All financial instruments that are initially recognised and subsequently
remeasured at fair value have been classified in accordance with the hierarchy
described in IFRS 13 Fair Value Measurement. The hierarchy groups fair-value
measurements into the following levels, based on the degree to which the fair
value is observable.
§ Level 1: fair value measurements are derived from unadjusted quoted prices
for identical assets or liabilities.
§ Level 2: fair value measurements include inputs, other than quoted prices
included within level 1, which are observable directly or indirectly.
§ Level 3: fair value measurements are derived from valuation techniques that
include significant inputs not based on observable data.
30 June 2025 31 Dec 2024
Unaudited
Audited
Assets Liabilities Assets Liabilities
$ million
$ million $ million $ million
Current
Measured at fair value through profit and loss
Foreign exchange derivatives 43 - - (25)
Commodity derivatives 8 (3) 26 (14)
Short term investments 24 - 25 -
Fair value of embedded derivative within gas contract 24 - -
5
99 (3) 56 (39)
Measured at fair value through other comprehensive income
Commodity derivatives 404 (25) 89 (396)
Foreign exchange derivatives 27 - - (27)
431 (25) 89 (423)
Total current 530 (28) 145 (462)
Non-current
Measured at fair value through profit and loss
Commodity derivatives - - 1 (2)
Contingent consideration - (40) - (52)
Other financial assets-investments 8 - - -
Foreign exchange derivatives - - 7 -
8 (40) 8 (54)
Measured at fair value through other comprehensive income
Commodity derivatives 100 (45) 36 (215)
Interest rate derivatives - (3) - -
Foreign exchange derivatives 144 - - (146)
244 (48) 36 (361)
Total non-current 252 (88) 44 (415)
Total current and non-current 782 (116) 189 (877)
Fair values of other financial instruments
The following financial instruments are measured at amortised cost and are
considered to have fair values different to their book values.
30 June 2025 31 December 2024
Book value Fair value Book value Fair value
$ million $ million $ million $ million
USD bond (1,130) (1,129) (496) (499)
EUR bonds (5,179) (5,223) (4,515) (4,555)
Total (6,309) (6,352) (5,011) (5,054)
The fair value of the bond is within level 2 of the fair value hierarchy and
has been estimated by discounting future cash flows by the relevant market
yield curve at the balance sheet date. The fair values of other financial
instruments not measured at fair value including cash and short-term deposits,
trade receivables, trade payables and floating rate borrowings equate
approximately to their carrying amounts.
18. Other reserves
Capital redemption reserve Cash flow hedge reserve(1) Costs of hedging reserve(1) Currency translation reserve Total
$ million $ million $ million $ million $ million
At 1 January 2024 (Audited) 8 3 4 3 18
Other comprehensive loss - (15) (6) (20) (41)
Total comprehensive income - (15) (6) (20) (41)
At 30 June 2024 (Unaudited) 8 (12) (2) (17) (23)
At 1 January 2025 (Audited) 8 (185) 26 133 (18)
Other comprehensive income/(loss) - 407 (29) (191) 187
Total comprehensive income - 407 (29) (191) 187
At 30 June 2025 (Unaudited) 8 222 (3) (58) 169
(1) Disclosed net of deferred tax.
19. Notes to the statement of cash flows
Net cash flows from operating activities consist of:
Six months ended 30 June 2025 2024
Unaudited Unaudited
$ million $ million
Profit before taxation 1,635 392
Adjustments to reconcile profit before tax to net cash flows:
Finance cost, excluding foreign exchange 314 160
Finance income, excluding foreign exchange (349) (15)
Depreciation, depletion and amortisation 1,544 582
Net impairment of property, plant and equipment 186 33
Impairment of right-of-use assets - 20
Exploration costs written-off 34 17
Share-based payments 24 26
Fair value movements on derivatives (83) -
Changes in provisions (42) -
Decommissioning expenditure (165) (129)
Movement in realised cash flow hedges not yet settled (3) (51)
Unrealised foreign exchange loss/(gain) 504 (14)
Working capital adjustments:
Decrease in inventories 14 47
Decrease in trade and other receivables 47 82
Increase/(decrease) in trade and other payables 136 (40)
Net tax payments (1,350) (157)
Net cash inflow from operating activities 2,446 953
Reconciliation of net cash flow to movement in net debt
30 June 2025 Year ended
Unaudited 31 Dec 2024
$ million Audited
$ million
Proceeds from drawdown of RBL facility - (178)
Proceeds from Euro bonds - (1,728)
Proceeds from USD bonds (900) -
Proceeds from RCF (220) (2,225)
Proceeds from bridge facility - (1,500)
Repayment of RBL facility - 178
Repayment of bridge facility - 1,500
Repayment of RCF 470 1,975
Repayment of USD bonds 262 -
Repayment of financing arrangement - 17
Bond debt arising on business combination(1) - (3,038)
Financing arrangement interest payable - (1)
Arrangement fees and related costs on bonds capitalised 6 11
Arrangement fees and related costs on RCF capitalised - 34
Arrangement fees and related costs on bridge facility capitalised - 13
Amortisation of arrangement fees and related costs capitalised (42) (102)
Reclassification of RCF arrangement fees and related costs to current and (28) -
non-current assets
Currency translation adjustment on Euro bonds (628) 263
Movement in total borrowings (1,080) (4,781)
Cash acquired on business combination - 748
Movement in cash and cash equivalents 1,906 (229)
Decrease/(increase) in net debt in the period 826 (4,262)
Opening net debt (4,424) (162)
Closing net debt (3,598) (4,424)
Analysis of net debt
30 June 2025 31 Dec 2024 Audited
Unaudited $ million
$ million
Cash and cash equivalents 2,711 805
RCF - (218)
Bonds (6,309) (5,011)
Closing net debt after total unamortised fees (3,598) (4,424)
The carrying values on the balance sheet are stated net of the unamortised
portion of issue costs and bank fees of $250 million (Dec 2024: $284 million)
of which fees associated with the RCF were $nil (Dec 2024: $32 million), and
$250 million is netted against the bond (Dec 2024: $252 million).
20. Related Parties
Transactions between the company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. There have been no significant changes to related party transactions
since 31 December 2024, refer to note 30 in the 2024 Annual Report and
Accounts for more information.
21. Distributions made and proposed
A dividend of 13.19 cents per Ordinary Share to be paid in pound sterling at
the spot rate prevailing on the record date was approved by shareholders on 8
May 2025 in relation to the year ended 31 December 2024.
Six months ended 30 June 2025 2024
Unaudited Unaudited
$ million $ million
Cash dividends on ordinary shares declared and paid:
Final dividend for 2024: 13.19 cents per share (2023: 13 cents per share) 228 100
Proposed dividends on ordinary shares:
Interim dividend for 2025: 13.19 cents per share (2024: 13 cents per share) 228 100
On 6 March 2025, a final dividend of $228 million was declared in respect of
the financial year ended 31 December 2024 and approved by shareholders on 8
May 2025 at the AGM and paid on 21 May 2025.
An interim dividend of $228 million was declared in respect of the financial
period ending 30 June 2025, to be paid on 24 September 2025 to all
shareholders on the register on 15 August 2025 (the "Record Date"). A dividend
reinvestment plan ("DRIP") is available to shareholders who would prefer to
invest their dividend in the shares of the company.
22. Post balance sheet events
On 9 July Harbour completed the disposal of the Vietnam business to EnQuest
plc for a headline value of $85 million with an effective date of 1 January
2024.
On 11 July 2025, the German Federal Council passed legislation mandating
annual 1 per cent reductions in the Federal Corporate Income Tax rate starting
from 2028 through to 2032. Including Trade Tax, Germany's headline tax rate is
expected to reduce from approximately 32 per cent to an estimated 27 per
cent. As the legislation was not substantively enacted at the balance sheet
date, its effects have not been reflected in the results for the period. If
enacted, it would have reduced the Group's deferred tax liability by an
estimated $66 million.
In prior periods, the Group disclosed a contingent liability, estimated at up
to $137 million as at 30 June 2025, in certain UK subsidiaries in respect of
an uncertain tax position related to the fair value movements and realised
gains and losses on derivative instruments entered into to hedge commodity
price risk. In the first half of 2025, HMRC completed a thorough review of
this matter and, subsequent to 30 June, confirmed that the Group's filed tax
position requires no adjustments. Consequently, the uncertainty has been
resolved and no financial impact results from this resolution, as no liability
was recognised in prior periods.
The Board approved a share buyback programme of the Company's voting ordinary
shares for up to a maximum aggregate consideration of $100 million. The
purpose of the programme is to reduce the Company's share capital and all
ordinary shares purchased as part of this programme will be cancelled. The
programme will commence on 8 August 2025, and will end no later than 31 March
2026.
Glossary
Alternative Performance Measures
Alternative performance measures are key performance indicators that
management consider to be important to monitor the operational and financial
performance of the business. They are not specifically defined under United
Kingdom adopted International Accounting Standards or other generally accepted
accounting principles. Harbour uses the following Alternative Performance
Measures:
a) EBITDAX / Adjusted EBITDAX h) Capital investment
b) Adjusted profit after taxation i) Free cash flow
c) Adjusted earnings per share (EPS) j) GHG intensity
d) Adjusted effective tax rate k) Leverage ratio
e) Operating cost per barrel l) Liquidity
f) DD&A per barrel m) Net cash/debt
g) Total capital expenditure n) Shareholder returns paid
Definitions, and for financial performance measures, a reconciliation from the
alternative performance measure to the nearest IFRS reported number, are
provided below. We have introduced additional alternative performance measures
in our H1 2025 reporting covering "adjusted EBITDAX", "adjusted profit after
taxation", "adjusted effective tax rate" and "adjusted earnings per share".
These are indicators that management consider better reflect true operational
and financial performance in the period and facilitate a more meaningful
period on period comparison.
a) EBITDAX/Adjusted EBITDAX
EBITDAX is defined as operating profit/(loss) for the period adjusted for
depreciation, depletion and amortisation, impairment of property, plant and
equipment, impairment of right-of-use assets, impairment of goodwill,
impairment of operating receivables, exploration and evaluation expenditure,
and new ventures, and exploration costs written-off. Adjusted EBITDAX is
defined as EBITDAX adjusted for gains/losses on disposal of assets, M&A,
restructuring and reorganisation costs, and other gains/losses that, by size
and nature, do not relate to the underlying financial performance of the
group.
Both are a measure of profitability and provides useful information for
stakeholders because they are tracked by management to evaluate the Group's
operating performance and to make financial, strategic and operating
decisions. Further, they may help stakeholders to better understand and
evaluate, in the same manner as management, the underlying trends in the
Group's operational performance on a comparable basis, period-on-period.
EBITDAX and Adjusted EBITDAX are reconciled to operating profit/(loss) as
follows:
Six months ended 30 June 2025 2024
$ million Unaudited $ million Unaudited
Operating profit 2,021 542
Depreciation, depletion and amortisation 1,544 582
Impairment of property, plant and equipment 186 33
Impairment of right-of-use assets - 20
Impairment of operating receivables 28 -
Exploration and evaluation expenditure, and new ventures 63 22
Exploration costs written-off 34 17
EBITDAX 3,876 1,216
M&A, restructuring and reorganisation costs 12 34
Adjusted EBITDAX 3,888 1,250
b) Adjusted profit after taxation
Adjusted profit after taxation is defined as profit after tax for the period
adjusted for impairment of property, plant and equipment; impairment of
right-of-use assets, impairment of goodwill, gains/losses on disposal of
assets, M&A, restructuring and reorganisation costs, other gains/losses
that, by size and nature, do not relate to the underlying financial
performance of the group, and the tax effects of these items and changes in
tax law.
Adjusted profit after taxation which is adjusted for items which can distort
year-on-year comparisons, is reconciled to profit after taxation as follows:
Six months ended 30 June 2025 2024
$ million Unaudited $ million Unaudited
Profit before taxation 1,635 392
Adjustments:
Impairment of property, plant and equipment 186 33
Impairment of right-of-use assets - 20
M&A, restructuring and reorganisation costs 12 34
Other gains/losses:
Foreign exchange differences on intercompany balances 193 (13)
Profit before taxation, as adjusted 2,026 466
Income tax expense (1,809) (335)
Tax effect of adjustment items to profit before taxation (118) (45)
Changes in tax law 311 -
Income tax expense, as adjusted (1,616) (380)
(Loss)/profit after taxation (174) 57
Adjusted profit after taxation 410 86
c) Adjusted earnings per share
Adjusted earnings per share is calculated as adjusted profit after taxation
attributable to shareholders divided by average number of shares for the year
of 1,724 million (2024: 770 million).
Six months ended 30 June 2025 2024
Unaudited Unaudited
Adjusted profit after taxation 410 86
Profit attributable to subordinated notes investors 33 -
Adjusted net profit attributable to shareholders 377 86
Average number of shares(1) 1,724 770
Adjusted earnings per share 22 11
(1) Earnings per share for non-voting shares reflects the 13% incremental
premium on this class of shares increasing the number of shares used in the
calculation
d) Adjusted effective tax rate
Adjusted effective tax rate represents the effective tax rate that results
from adjusting both profit before taxation and income tax expense for the
impact of the adjustments made in arriving at Adjusted profit after taxation
as set out in section b) above. The nearest equivalent measure on an IFRS
basis is the effective tax rate on profit before taxation for the period.
Six months ended 30 June 2025 2024
$ million Unaudited $ million Unaudited
Profit before taxation 1,635 392
Profit before taxation, as adjusted 2,026 466
Income tax expense (1,809) (335)
Income tax expense, as adjusted (1,616) (380)
Reported effective tax rate (%) 111 85
Adjusted effective tax rate (%) 80 82
e) Operating cost per barrel
Direct operating costs (excluding over/underlift) for the period, including
tariff expense, insurance costs and mark to market movements on emissions
hedges, less tariff income, divided by working interest production. This is a
useful indicator of ongoing operating costs from the Group's producing assets.
Six months ended 30 June 2025 2024
$ million Unaudited $ million Unaudited
Operating costs
Field operating costs 1,142 561
Non-cash depreciation on non-oil and gas assets (26) (11)
Tariff income (25) (16)
Total operating costs 1,091 534
Operating costs per barrel ($ per barrel) 12.4 18.5
f) DD&A per barrel
Depreciation, depletion and amortisation (DD&A) of oil and gas properties
for the period divided by working interest production. This is a useful
indicator of ongoing rates of depreciation and amortisation of the Group's
producing assets.
Six months ended 30 June 2025 2024
$ million Unaudited $ million Unaudited
Depreciation, depletion and amortisation (DD&A)
before impairment charges
Depreciation of oil and gas properties 1,519 565
Depreciation of non-oil and gas properties 15 8
Amortisation of intangible assets 10 9
Total DD&A 1,544 582
DD&A before impairment charges ($ per barrel) 17 20
g) Total capital expenditure
Capital investment 'additions' per notes 11 and 12 plus decommissioning
expenditure 'amounts used' per note 15.
h) Capital investment
Depicts how much the Group has spent on purchasing fixed assets in order to
further its business goals and objectives. It is a useful indicator of the
Group's organic expenditure on oil and gas assets, and exploration and
appraisal assets, incurred during a period.
i) Free cash flow
Operating cash flow less cash flow from investing activities (exclusive of net
expenditure on business combinations) less interest and lease payments
(principal and interest).
j) GHG intensity
Reported on a gross operated basis and excluding offsets.
k) Leverage ratio
Net debt/last twelve months EBITDAX.
l) Liquidity
The sum of cash and cash equivalents on the balance sheet and the undrawn
amounts available to the Group on our principal facilities. This is a key
measure of the Group's financial flexibility and ability to fund day-to-day
operations.
m) Net cash/debt
Total revolving credit facility and bonds (net of the carrying value of
unamortised fees) less cash and cash equivalents recognised on the
consolidated balance sheet. This is an indicator of the Group's indebtedness
and contribution to capital structure.
n) Shareholder returns paid
Dividends plus share buybacks completed in the period are included in this
metric which shows the overall value returned to stakeholders in the period.
INDEPENDENT REVIEW REPORT TO HARBOUR ENERGY PLC
Conclusion
We have been engaged by the Company to review the condensed consolidated set
of financial statements in the half-yearly financial report for the six months
ended 30 June 2025 which comprises the condensed consolidated income
statement, the condensed consolidated statement of comprehensive income, the
condensed consolidated balance sheet, the consolidated statement of changes in
equity, the condensed consolidated statement of cash flows and the related
notes 1 to 22. We have read the other information contained in the half yearly
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed consolidated
set of financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed consolidated set of financial statements in the
half-yearly financial report for the six months ended 30 June 2025 is not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34 and the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK) "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" (ISRE) issued by the Financial
Reporting Council. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with UK adopted international accounting standards. The
condensed consolidated set of financial statements included in this
half-yearly financial report has been prepared in accordance with UK adopted
International Accounting Standard 34, "Interim Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management has
inappropriately adopted the going concern basis of accounting or that
management has identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed consolidated set of financial statements
in the half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the Company in accordance with guidance
contained in International Standard on Review Engagements 2410 (UK) "Review of
Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
London, United Kingdom
6 August 2025
Acronyms
2C Best estimate of contingent resources
2P Proven and probable reserves
AGM Annual general meeting
Bbl Barrel
Boe Barrel of oil equivalent
CCS Carbon capture and storage
CGU Cash generating unit
CO(2) Carbon dioxide
DD&A Depreciation, depletion and amortisation
DRIP Dividend re-investment plan
EBITDAX Earnings before interest, tax, depreciation, amortisation and exploration
EPL Energy Profits Levy (UK)
EPS Earnings per share
ESOP Employee stock ownership plan
FEED Front End Engineering Design
FID Final investment decision
FPSO Floating production storage offtake vessel
FVLCD Fair value less costs of disposal
FX Foreign exchange
GHG Greenhouse gas
IAS International Accounting Standards
IFRIC International Financial Reporting Interpretations Committee
IFRS International Financial Reporting Standards
Kboepd Thousand of barrels of oil equivalent per day
kgCO(2)e Kilograms of carbon dioxide equivalent
LNG Liquified natural gas
LTM Last twelve months
Mmboe Million barrels of oil equivalent
Mscf Thousand standard cubic feet
Mtpa Million tonnes per annum
NBP National balancing point
NOK Norwegian krone
OECD Organisation for economic cooperation and development
RBL Reserve based lending
RCF Revolving credit facility
SPA Sale and purchase agreement
Tcf Trillion cubic feet
TRIR Total recordable injury rate
USD US dollar
1 (#_ednref1) Net debt excludes $0.2bn of mark-to-market cross-currency
swaps benefit as at 30 June 2025.
2 (#_ednref2) Includes tariffs. 2025 guidance of $13.5/boe assumes $1.35/£,
$1.15/€ and a NOK10.25/$ for H2 2025. Previous guidance of c.$14/boe assumed
$1.30/£, $1.1/€ and NOK10.5/$ for Q2-Q4 2025.
3 (#_ednref3) This is based on average 2025 Brent and European gas prices of
$68/bbl and $12.7/mscf equating to c.$65/bbl and c.$12/mscf for H2 2025.
4 (#_ednref4) Based on Harbour's free cash flow outlook of $1.0bn and
assuming the buyback completes by year end 2025.
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