Harbour Energy (HBR) H2 2024 earnings summary

Executive summary

• Completed transformational acquisition of Wintershall Dea, tripling production and reserves, expanding global presence, and achieving investment-grade credit ratings.

• 2024 production rose 40% to 258,000 BOE/d, with strong operational delivery and new projects online in the UK and Argentina.

• Portfolio now diversified across geographies and commodities, with major positions in Norway, UK, Argentina, Mexico, and Germany, and reserve life extended to 19 years.

• Focus remains on disciplined capital allocation, maintaining a strong balance sheet, and delivering shareholder returns, with an annual dividend policy of $455 million.

Financial highlights

• Revenue increased by 65% to $6.2 billion and EBITDA/EBITDAX 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, planned shutdowns, and deferred tax payments.

• Net debt increased to $4.7 billion at year-end 2024, mainly due to acquisition-related financing.

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

• Equity increased to $6.3 billion, reflecting new shares issued for the acquisition and a transformed balance sheet.

Outlook and guidance

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

• Expect 15% reduction in unit operating costs to ~$14/BOE and material increase in free cash flow generation, with 2025 FCF yield projected at 19% of market cap.

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

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