Image source: © 2025 Krish Capital Pty. Ltd.

Highlights:

  • Harbour Energy reported 1H25 production of 488 kboepd, up from 159 kboepd in 1H24
  • Free cash flow rose to GBP 1.36bn in 1H25, enabling new GBP 100 million buyback programme
  • Harbour Energy reduced unit operating costs by c.30% to $12.4/boe and net debt to GBP 3.8 billion.

Harbour Energy plc (LSE: HBR), a UK-based independent oil and gas company with a global upstream portfolio, has released its unaudited half-year results for the six months ended 30 June 2025. The company highlighted production gains, improved financial metrics, and strategic updates stemming from its acquisition of Wintershall Dea. Production volumes increased significantly to 488,000 barrels of oil equivalent per day (kboepd), compared to 159 kboepd during the same period in 2024. The higher output is primarily attributed to the integration of Wintershall Dea’s assets. Harbour noted that unit operating costs were reduced by approximately 30% to $12.4/boe, while net equity greenhouse gas (GHG) intensity declined from 27 to 12 kgCO₂/boe.

Revenue and other income rose to GBP 5.3 billion, supported by realised post-hedge prices of USD 71/bbl for oil and USD 13/mscf for European gas. Earnings before interest, taxes, depreciation, amortisation, and exploration expenses (EBITDAX) increased to GBP 3.9 billion, up from GBP 1.2 billion in the prior-year period. Free cash flow rose to GBP 1.36 billion, driven by higher production and cost optimisation. However, the group reported a net loss after tax of USD 0.2 billion, reflecting a USD 0.3 billion deferred tax charge tied to UK fiscal changes and USD 0.2 billion in foreign exchange losses. On an adjusted basis, after-tax profit rose to USD 0.4 billion, compared to USD 0.1 billion in H1 2024, equating to adjusted earnings per share of 22 cents.

During the period, Harbour advanced a number of strategic projects. New wells were brought online at Maria Phase 2 in Norway, the Vaca Muerta basin in Argentina, and across UK fields. Development of the Dvalin North project in Norway remains on track for a late 2026 start. An investment decision was also taken on Southern Energy SA, a phased 6 mtpa LNG project in Argentina. The company upgraded its gross 2C resource estimate for the Kan field in Mexico by 50% to approximately 150 mmboe, with Harbour holding a 70% stake. The business completed its exit from Vietnam following the divestment of its assets there in July 2025.

Harbour’s financial position was supported by the issuance of GBP  0.9 billion in senior notes and GBP 0.9 billion in subordinated notes, effectively addressing maturities through 2028. Net debt was reduced to GBP  3.8 billion, down from GBP 4.7 billion at the end of 2024, while leverage declined to 0.5x from 1.1x. Investment-grade credit ratings with a stable outlook were maintained. Production guidance for the full year has been slightly increased to 460–475 kboepd (from 455–475 kboepd). Unit operating cost guidance was revised down to approximately GBP 13.5/boe. Capital expenditure guidance remains unchanged at GBP 2.4–GBP 2.5 billion.

The company declared an interim dividend of GBP 227.5 million (13.19 cents per share), in line with its annual GBP 455 million dividend policy, and announced a new GBP 100 million share buyback programme. The revised guidance puts the total shareholder payout for the year at approximately 55% of free cash flow.

HBR is trading 14.99% higher at GBX 234.80  per share as of 7 August 2025.