24th Aug 2023 09:17
(Alliance News) - Harbour Energy PLC on Thursday said production decreased in the first half year, alongside decreases in revenue, earnings and profit.
The London-based oil and gas company - which has interests in the UK, Norway, Indonesia, Mexico and Vietnam - declared a 12 US cents per share interim dividend. This was unchanged from its final 2022 payout and up 9.1% from 11 cents per share the prior year.
Harbour Energy shares fell 2.1% 236.63 pence in London on Thursday.
However, pretax profit for the first half of 2023 dropped 71% to USD429 million from USD1.5 billion the year before.
Harbour also swung to a post-tax loss of USD8 million from a USD984 million, which it attributed to one-off charges and a higher UK tax rate. It said this was mainly caused by the UK government's introduction of the energy profits levy driving the headline tax rate on oil and gas profits up to 75% from 40% last year.
In response to the EPL, Harbour said, "we scaled back our activities in certain areas and acted decisively to manage our cost structure," including a review of its UK organisation. It expects this to deliver around USD50 million in annual savings from next year.
Revenue and other income fell to USD2.02 billion from USD2.67 million. Earnings before interest, tax, depreciation, amortisation and exploration expenses also decreased to USD1.43 billion from USD2.02 billion, and Harbour swung to a 0.0 pence basic loss per share from 1.1p in earnings.
Production decreased to 196,000 barrels of oil equivalent per day from 211,000. Harbour said this was in line with guidance, and split evenly between oil and natural gas. The price of crude oil decreased during the period to USD76 from USD82 per barrel of oil equivalent.
The cost of operations however also decreased, to USD1.22 billion from USD1.37 billion.
Harbour also recorded zero net debt at June 30, down from USD800 million at December 31.
Harbour said it has narrowed its full-year production guidance to between 185,000 and 195,000 boepd; the upper limit previously was 200,000 barrels. It expects to accrue USD200 million in net debt due to the phasing of capex and timing of tax payments, but to reduce this back to zero in the first half of 2024.
"We remain focused on maximising the value of our UK oil and gas portfolio, advancing our organic development projects and disciplined capital allocation," said Chief Executive Officer Linda Cook. "This has allowed us to continue to generate significant free cash flow supporting material shareholder distributions while maintaining capacity for meaningful but disciplined [mergers and acquisitions].
"We have also progressed our strategic investment opportunities outside of UK oil and gas - in Indonesia, in Mexico and in [carbon capture and storage]. These have the potential to materially increase our reserve life, support shareholder returns and diversify our company over time."
By Emma Curzon, Alliance News reporter
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