REG - Harbour Energy PLC - Trading and Operations Update

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RNS Number : 4675G  Harbour Energy PLC  06 November 2025

 

Harbour Energy plc

("Harbour" or the "Company")

Trading and Operations Update

6 November 2025

 

2025 free cash flow outlook reinforced and production guidance upgraded

 

Harbour today provides the following unaudited Trading and Operations Update
for the nine months to 30 September 2025.

 

Linda Z Cook, Chief Executive Officer, commented:

"We delivered another strong performance, driven by excellent operational
execution and strict capital discipline while benefitting from our increased
scale and resilience. As a result, we are improving our production guidance
for the full year and reaffirming our free cash flow outlook of $1 billion
despite a softer commodity price environment.

"We also made good progress across our strategic projects including at Zama
and Kan in Mexico and Southern Energy LNG in Argentina, underpinning longer
term material production and cash flow."

 

Strong operational delivery

 § Increased and diversified production of 473 kboepd (2024: 177 kboepd) to
 end of September, broadly split 40% liquids, 40% European gas and 20% other
 gas
 -   Full contribution from Wintershall Dea assets, including 165 kboepd
 from Norway and 75 kboepd from Argentina
 -   New wells on-stream in the third quarter including at Maria Phase 2
 (Norway), J-Area (UK) and APE (Argentina) partially offset by Njord (Norway)
 underperformance
 -    Successful completion of planned maintenance shutdowns in Norway and
 the UK
 § Given the strong performance over the first nine months, and
 notwithstanding the divestment of Vietnam (5 kboepd in the first half) in
 July, 2025 production guidance narrowed further upwards to 465-475 kboepd
 (previously 460-475 kboepd)
 § Unit operating costs c.30% lower at $13/boe (2024: $19/boe), reflecting the
 addition of the Wintershall Dea portfolio.  2025 guidance reiterated at
 c.$13.5/boe, with strong volumes and cost performance together with the
 divestment of Vietnam more than offsetting FX headwinds
 § Continued focus on safety with total recordable injury rate (TRIR) of 1.0
 per million hours worked (2024: 1.0); greenhouse gas intensity materially
 lower at 13 kgCO(2)/boe (2024: 23 kgCO(2)/boe)(1)
 § High return, short cycle investments remain on track, including completion
 of Maria Phase 2 (Norway) with the fourth and final well due online before
 year-end, Dvalin North (Norway) production start-up in 2026, and further
 drilling at APE (Argentina) recommencing later this year
 § Review of the UK organisation resulting in a reduction of 250 positions;
 the cumulative headcount reduction has been c.600 roles since the EPL was
 introduced in 2022. This aligns with significantly lower anticipated UK
 investment driven by the continued punitive domestic fiscal regime
 § Exit from the Transition Services Agreement supporting the Wintershall Dea
 portfolio was completed in September as scheduled, enabling the focus to shift
 to systems and process simplification and driving efficiencies.  Early
 savings have been captured including through renegotiation of supplier
 contracts and rationalisation of offices in Mexico and Norway

Strategic projects progressed underpinning future reserves replacement and
optionality

 § Continued progress at Southern Energy LNG (Argentina), a two-vessel c.6
 mtpa project (Harbour 15%), following final investment decision earlier this
 year
 -  All environmental licences, export permits and RIGI incentives now
 secured for both vessels
 -   Major contracts awarded including the EPC contracts for the mooring
 system, the offshore pipeline and the compression stations
 § In Mexico, regarding the 750 mmboe gross Zama oil field (Harbour 32.2%), a
 more capital efficient phased development plan has been submitted to the
 regulator for approval
 § Also in Mexico, FPSO options for the Kan field (Harbour 70%, operator) are
 being matured with commencement of FEED targeted for 2026. This follows a
 successful appraisal programme which resulted in resource estimates for the
 field being upgraded by 50% to c.150 mmboe gross
 § Evaluation of development options for the multi-TCF Andaman Sea gas play
 (Indonesia) continues, including a phased development of all discoveries with
 initial production from the Tangkulo field
 § In Egypt, following exploration success early this year near our West Nile
 Delta infrastructure, final investment decisions for the development of Fayoum
 5 and El King are targeted for 2026.  Successful appraisal drilling at Disouq
 with further drilling planned for 2026
 § Active portfolio management with the divestment of our assets in Vietnam;
 in addition, decisions taken to exit several exploration licences in Mexico
 and certain non-core CCS licences in the Netherlands and the UK

 

Significant free cash flow generation and delivery of capital allocation
priorities

 § Increased revenue for the period of $7.6 billion (2024: $3.1 billion)
 mainly reflecting higher production. Realised post-hedge oil and European gas
 prices of $71/bbl (2024: $82/bbl) and $13.4/mscf (2024: $9.1/mscf),
 respectively
 § Total capital expenditure to end of September of c.$1.6 billion (2024:
 c.$1.0 billion), reflecting the addition of the Wintershall Dea portfolio.
 2025 guidance lowered to c.$2.4 billion (previously $2.4-2.5 billion) driven
 by reduced activity in the UK, a pause in drilling at APE (Argentina) to align
 with domestic gas market requirements, and the reduction of some Mexico
 expenditures
 § 2025 free cash flow outlook of c.$1.0 billion reiterated despite the lower
 commodity price environment(2). This reflects continued strong operational
 performance and improved working capital management
 § An interim dividend of $227.5 million was paid in September, in line with
 Harbour's $455 million annual dividend policy. In addition, Harbour initiated
 a $100 million share buyback in August, bringing 2025 total expected payout to
 c.55% based on $1 billion free cash flow outlook(3).
 § Net debt of $4.2 billion ($4.1 billion post-swap) at 30 September, an
 increase from $3.8 billion ($3.7 billion post-swap) at half year reflecting
 lower production and dividend and tax payments in the third quarter
 § €1 billion senior notes repaid in September with all remaining debt
 maturities to 2028 pre-funded
 § Strong hedge position with a mark to market gain of $380 million at 30
 September. For 2026, c.50% of our economic exposure to European gas prices and
 c.35% of our economic exposure to Brent are currently hedged, at $11.4/mscf
 and $72/bbl, respectively
 § S&P reconfirmed Harbour's investment grade credit rating BBB- with
 stable outlook in September; Moody's and Fitch reconfirmed investment grade
 credit ratings of Baa2 and BBB- respectively with stable outlook in March

 

Enquiries

Harbour Energy
plc
+44 (0) 203 833 2421

Elizabeth Brooks, SVP Investor Relations

Andy Norman, SVP Communications

Email: CorporateExternalCommunications@harbourenergy.com
(mailto:CorporateExternalCommunications@harbourenergy.com)

 

(1) Scope 1 and 2 emissions on a net equity basis

(2) Full year 2025 free cash flow outlook reflects the current forward curve
for the remainder of the year resulting in 12 month average Brent oil and
European gas prices of $68/bbl and $12.0/mscf respectively (previously $68/bbl
and $12.7/mscf). A $5/bbl change in 2025 Brent oil prices or a $1/mscf change
in 2025 European gas prices impacts full year free cash flow by c.$115
million, assuming a stable USD foreign exchange rate. Free cash flow outlook
assumes mid-point of production and capex guidance. A 1:1 conversion rate for
$/mmbtu to $/mscf has also been assumed.

(3) This assumes that the current pace of the programme is maintained
resulting in c.$90m of the $100 million buyback having completed by year-end.

 

Appendix:

 

Group production

 

               1 January - 30 September 2025  1 January - 30 September 2024

               (net, kboepd)                  (net, kboepd)
 Norway        165                            10
 UK            156                            142
 Germany       28                             3
 Argentina     75                             7
 Mexico        10                             1
 North Africa  31                             4
 SE Asia       8                              11
 Total Group   473                            177(1)

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

 

Hedging schedule

 

                    2025                   2026                   2027
                    Volume  Average Price  Volume  Average Price  Volume  Average Price
                    mmboe   $/mscf         mmboe   $/mscf         mmboe   $/mscf
 Europe and UK gas  36      14             26      11             9       11
                    mmbbl   $/bbl          mmbbl   $/bbl          mmbbl   $/bbl
 Oil                18      76             15      72             4       66

As at 30 September 2025

Average price reflects volume weighted average of traded swap/fixed price and,
for collar structures, the forward curve at 30 September 2025 if forward curve
pricing is between the cap and the floor or the floor/cap price if forward
curve pricing is outside collar range.

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