Harbour Energy's Transformative Growth Forecasts Output Increase

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Zacks Equity Research

Mon, Jan 27, 2025, 5:46 AM 3 min read

Harbour Energy plc HBRIY has marked 2024 as a pivotal year in its growth journey following the completion of its $11.2 billion acquisition of Wintershall Dea. The acquisition, which was completed in September 2024, has significantly bolstered the company’s production capacity and geographical reach. Four months of contribution from the acquired portfolio boosted Harbour Energy’s production levels to an average of 258,000 barrels of oil equivalent per day (boepd) in 2024, a remarkable 40% increase compared to 2023 levels.

The company emphasized the importance of this transformational deal, which led to an expansion of HBRIY’s assets in regions like Norway, Germany, Denmark, Argentina, Mexico, Egypt, Libya and Algeria.

HBRIY’s 2024 Success Highlights

Harbor Energy enjoyed a boost in its production levels and a set of diversified operations in 2024 after the transformational acquisition. The company’s outstanding production was split across liquids (40%), European gas (45%) and non-European gas (15%). Operating costs remained steady at $16.5/boe, aligning with its previous guidance. The company also made significant progress in carbon capture and storage with a focus on building long-term cash flow potential.

Financially, Harbour Energy anticipates a 65% revenue increase to $6.1 billion, driven by higher production. Capital expenditure is anticipated to be $1.8 billion, which again aligns with its previous guidance. HBRIY’s shareholder distributions totaled $200 million, resulting in $1.2 billion returned to its shareholders over three years via dividends and buybacks. Net debt remained at $4.7 billion, supported by a transformed debt structure and upgraded credit ratings.

HBRIY’s 2025 Guidance

In 2025, Harbour Energy expects production to rise significantly to 450,000-475,000 boepd, driven by a full year’s contribution from the Wintershall Dea portfolio. The company’s unit operating costs are expected to be $14/boe, reflecting Wintershall Dea's lower-cost assets.

Capital expenditure is forecasted to increase from 2024 to $2.4-$2.6 billion, highlighting the integration of Wintershall’s assets. The company is expected to generate a free cash flow of about $1 billion. It plans to distribute $455 million in dividends, with $227.5 million allocated for the 2024 final dividend and $227.5 million for the 2025 interim payout.