Harbour Energy turns losses into a profit of £76.8m following its merger with Premier Oil to form the North Sea’s biggest producer
- London-based firm reveals cashflow of £515m for 2021, up from £427m
- Profits post-tax stood at £76.8m, compared to a loss of £591m the previous year
- Harbour expects to produce between 195,000 to 210,000 barrels of oil equivalent per day (boe/d) this year, compared with 175,000 boe/d in 2021
The British North Sea’s biggest oil and gas producer Harbour Energy has reported strong results for its first full-year following its merger with Premier Oil last April.
The London-headquartered firm revealed a cashflow of £515million ($678 million) for 2021, up from a pro-forma £427million ($562 million) in 2020.
Meanwhile, profits after tax came it at £76.8 million ($101 million), compared to a loss of £591 million ($778 million) the previous year.
The British North Sea’s biggest oil and gas producer Harbour Energy has reported strong results for its first full-year following its merger with Premier Oil last April
It forecast that, at an oil price of £76.80 ($100) a barrel and a gas price of 200 pence per therm, free cashflow could reach between £1.1billion ($1.5billion) and £1.2billion ($1.7billion) after tax, and result in a £152million ($200million) annual dividend.
Commenting on the results, Harbour Energy CEO Linda Cook, who made her mark as the first woman chief executive of a major listed UK energy company, said: ‘2021 was a transformational year with completion of the Merger, our third significant transaction since 2017.
‘As a result, we became a public company with a global footprint and the largest London-listed independent oil and gas company.
‘With our scale, our commitment to producing safely and responsibly, our robust balance sheet and track record of successful M&A, I believe we are well placed to deliver value creation, growth and shareholder returns.
‘I am proud of all we accomplished in our first year as a listed company and excited for our future.’
Harbour expects to produce between 195,000 to 210,000 barrels of oil equivalent per day (boe/d) this year, compared with 175,000 boe/d in 2021.
Harbour, like most of its peers, hedges some of its sales to shield against price volatility, which can mean producers miss out on some peaks of price rallies, such as the ones the oil and gas market has seen in recent months.
Benchmark oil prices currently trade around £76.80 ($100) a barrel.
Out of its 2022 and 2023 oil output, it hedged about 26 million barrels at an average price of $61.05-$61.15 a barrel.
Out of its gas production, it hedged 25.37 million boe in 2022 at an average price of 50.75 p/therm and 23 million boe in 2023 at an average 40.86 p/therm.
Harbour said it planned to ask shareholders to grant it the ‘general authority’ to buy back up to 15 per cent of its shares.
The merger of Chrysaor and Premier Oil, which completed last April, created Harbour Energy and replaced Premier’s stock exchange listing.
The reverse takeover of Chrysaor by Premier Oil, which traces its history back to the 1930s, ushered in a new era of private money from groups such as Chrysaor or HitecVision, giving a new lease of life to the oil industry in the North Sea.
Oil majors have been selling assets in the North Sea, a relatively expensive environment to extract oil, to focus investment in more profitable fields elsewhere and their transition to lower-carbon energy.