Harbour Energy (HBR) H2 2024 earnings summary

Executive summary

• Completed transformational acquisition of Wintershall Dea, tripling 2P reserves and 2C resources to 3.2 bnboe, significantly increasing production, scale, and global diversification.

• 2024 production rose 40% to 258,000 BOE/d, with a full-year pro forma run rate of 500,000 BOE/d by Q4, supported by new projects in the UK and Argentina.

• Achieved investment-grade credit ratings and confirmed an annual dividend policy of $455 million.

• Portfolio now spans five countries producing over 20,000 BOE/d, with a 19-year reserve and resource life.

Financial highlights

• Revenue increased by 65% to $6.2 billion, with EBITDA/EBITDAX up 50% to $4 billion, driven by higher production and European gas prices.

• Free cash flow for 2024 was $0.1 billion, impacted by working capital adjustments, acquisition-related costs, and deferred tax payments.

• Net debt increased to $4.7 billion due to acquisition financing; equity rose to $6.3 billion.

• Effective tax rate was 108%, resulting in a net loss after tax of $93 million, mainly due to UK impairments and EPL accounting.

• Operating costs stable at $16.50/BOE in 2024; capital expenditure increased to $1.8 billion, mainly due to the acquisition.

Outlook and guidance

• 2025 guidance: production of 450,000–475,000 BOE/d, with Q1 2025 averaging 500,000 BOE/d and full-year Wintershall Dea contribution.

• 2025 opex expected at ~$14/BOE, with total capex of $2.4–2.6 billion and levered free cash flow of ~$1 billion at $80/bbl Brent and $13/mscf Euro gas.

• CapEx to decline from ~$2.5 billion in 2025 to <$2 billion in 2026, focusing on high-return, short-cycle projects.

• Dividend policy maintained at $455 million annually, with potential for further buybacks as debt is reduced.