Harbour Energy (HBR) Q4 2025 earnings summary

Executive summary

• Achieved record production of 474,000 barrels per day in 2025, up 84% year-over-year, driven by portfolio upgrades and strategic acquisitions, with strong operational and financial performance.

• Completed LLOG acquisition in February 2026, enhancing resilience and free cash flow growth; announced divestments and further M&A activity, including Waldorf acquisition and Southeast Asia exits.

• Focused on five core countries (Norway, UK, Argentina, Mexico, US), now accounting for 90% of production, cash flow, and reserves.

• Maintained high safety standards, with a slight increase in recordable injury rate due to expansion, but improved process safety and emissions intensity.

• Delivered high return, short-cycle investments and improved cost structure.

Financial highlights

• Generated $1.1 billion in free cash flow, exceeding guidance, and reduced net debt to $4.4 billion by year-end 2025, rising to $7.2 billion post-LLOG acquisition.

• Revenue for 2025 was $10.3 billion, up from $6.2 billion in 2024; adjusted EBITDA/EBITDAX rose by 77% to $7.2 billion.

• Adjusted profit after tax increased to $0.6 billion, up over 60%, despite a reported after-tax loss due to high effective tax rates and impairments.

• Paid $3.5 billion in cash taxes, mainly in the UK and Norway.

• Shareholder distributions declared totaled $478 million, including dividends and share buybacks.

Outlook and guidance

• 2026 production guidance raised to 475,000–500,000 barrels per day, with unit OpEx expected at $14.5/BOE due to LLOG and Waldorf integration.

• CapEx for 2026 projected at $2.2–$2.4 billion, mainly from LLOG, with free cash flow sensitivity of $170 million per $5 oil price change.

• Free cash flow for 2026 guided at $0.63 billion, with sensitivity to Brent and Euro gas prices.

• Free cash flow expected to rise to $1 billion in 2028, supported by U.S. Gulf growth and Waldorf synergies.

• Updated distribution policy: 45–75% of free cash flow to be returned to shareholders, with a $300 million base dividend.