Harbour Narrowly Raises Output Projection After Wintershall Dea Acquisition

Wedoany.com Report-Nov 16,  Harbour Energy PLC slightly increased the lower end of its output guidance for 2024 from 250,000 barrels of oil equivalent a day (boed) to 255,000 boed to reflect four months of contribution from assets acquired September.

The upper end remains at 265,000 boed. The guidance is about half of Harbour’s projected gradual production increase to 500,000 boed following its purchase of the upstream operations of Germany’s Wintershall Dea AG, except those in Russia. The transaction was completed September.

For the first nine months of 2024 Harbour’s production averaged 177,000 boed, down from 189,000 boed in the same period last year, according to partial financial results it released online. However, last month, it produced 503,000 boed, with the company citing the completion of planned maintenance in Norway and the United Kingdom.

Harbour reported $3.1 billion in estimated revenue for the first three quarters. It logged post-hedging realized prices of $82 per barrel for oil, $9 per million cubic feet (MMcf) for European gas and $6 per MMcf for non-European gas.

Capital expenditure between January and September totaled about $1 billion. Harbour raised its full-year capex guidance from around $1.7 billion to approximately $1.8 billion to reflect “phasing of spend between pre- and post-completion of the Wintershall Dea acquisition versus that estimated at the time of completion”.

Harbour expects about $300 million in free cash flow excluding shareholder returns and one-off acquisition-related costs at the end of 2024.

Yearend net debt is projected to remain at the level as of end-September, which was $4.7 billion. Last month it issued EUR 1.6 billion ($1.69 billion) of senior bonds to repay a bridge facility used for the Wintershall Dea acquisition.

Harbour paid about $100 million in interim dividends in September, “in line with Harbour’s prior $200 million annual dividend policy”, the company said. It has increased annual dividends to $455 million, consisting of $380 million for ordinary shares and $75 million for non-voting shares. Subject to shareholder approval, the annual dividends will be paid in two equal installments starting with a final dividend for 2024 to be paid in May 2025.

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