Harbour Energy Plc · LSE:HBR
Harbour Energy — Investor Presentation (January 2024)
31 slides from Harbour Energy's investor presentation, January 2024
Slide 1: Investor Presentation
Investor Presentation Harbour Energy plc January 2024
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements, including in relation to the financial condition of the Harbour group (the "Group") and the results of operations and businesses of the Group. Forward-looking statements are sometimes, but not always, identified by their use of a date
Slide 3: A pure play upstream global oil & gas producer
A pure play upstream global oil & gas producer Safe and responsible High quality, cash Portfolio of strategic Robust financial position, operations generative portfolio investment opportunities strict capital discipline Playing a significant role in Targeting high return, short Organic diversificati
Slide 4: Building a global, diversified oil and gas company via disciplined M&A
Building a global, diversified oil and gas company via disciplined M&A Transformational acquisition of Wintershall Dea asset portfolio announced December 2023, in line with strategy ▪ Ensure safe, reliable and environmentally responsible operations >500 kboepd ▪ Maintain a high-quality portfolio of
Slide 5: Harbour at a glance
Harbour at a glance A global independent O&G company focused on value creation, cash flow and distributions Our purpose is to play a significant role in meeting the world’s energy needs through the safe, efficient and responsible production of hydrocarbons, while Norway creating value for our stakeh
Slide 6: 2023 Highlights
2023 Highlights Delivering our strategy
Slide 7: 2023 Highlights
2023 Highlights Maximising the value of our production base ▪ Production of 186 kboepd, split c.50% liquids / 50% gas; opex of c.$16/boe ▪ Tolmount East start up; Talbot development progressed and Leverett appraisal success ▪ Improved safety record (TRIR reduced to 0.7; no Tier 1 or 2 process safety
Slide 8: Operational review
Operational review Maximising the value of our production base
Slide 9: A focus on safe and responsible operations
A focus on safe and responsible operations Further improvement in our safety record with no lost time injuries or Tier 1 or 2 events during 2023 Strong occupational safety record Improved process safety performance TRIR (per million hours worked)1 Events (Tier 1 and Tier 2)1 Tier 1 Tier 2 1.3 2 c. 1
Slide 10: Production averaged 186 kboepd, in line with guidance
Production averaged 186 kboepd, in line with guidance … underpinned by a diverse, cash generative production base with a good balance of oil and gas Production kboepd 2023 Production Actual Future ▪ Split 50% liquids / 50% gas 200 Guidance 150-165 ▪ Strong underlying performance from operated kboepd
Slide 11: A proactive operator with competitive operations in the UK
A proactive operator with competitive operations in the UK Active management of cost structure to protect margins and ensure a sustainable and competitive business Efficiency Cost base Reliable operations, especially at ▪ Leveraging operational control and UK operating costs operated GBA, Elgin/Fran
Slide 12: Maximising value of our North Sea portfolio through targeted investment
Maximising value of our North Sea portfolio through targeted investment… ... and realising the upside of our existing assets to support production and cash flow generation Track record of adding reserves Proactive operatorship Potential to improve recovery Shell/Conoco UK acquisitions ▪ Production a
Slide 13: 2024 drilling programme
2024 drilling programme Converting UK 2P reserves into production and targeting significant resource additions internationally 2024 TODAY NORTH SEA J-Area Talbot Judy RB Chalk Jocelyn South RK Redrill GBA Leverett Callanish F6 Gilderoy Brodgar N&E AELE NW Seymour Clair Phase 1 A27 A26 Clair Ridge Pl
Slide 14: Organic growth and diversification
Organic growth and diversification Growing portfolio of strategic investment opportunities
Slide 15: Growing portfolio of strategic organic investment opportunities
Growing portfolio of strategic organic investment opportunities … have the potential to materially increase our reserves life Indicative reserve additions1 mmboe Mexico Indonesia c.100 mmboe 2C1 c.140 mmboe 2C1 400 Zama Active efforts to mature into 2P Zama Andaman II / South Tuna ▪ 12% non-operated
Slide 16: Harbour-led Viking CCS progressing to FEED
Harbour-led Viking CCS progressing to FEED Uniquely positioned to deploy skills and infrastructure to accelerate UK CCS Viking is vital to the UK’s capture target of 20-30 mtpa by 2030 ▪ Track 2 status awarded and FEED contract signed ▪ Successful submission of Development Consent Order for onshore
Slide 17: Andaman Sea (Indonesia) campaign targeting multi-TCF of gas
Andaman Sea (Indonesia) campaign targeting multi-TCF of gas Demonstrate commercial viability of Andaman II licence and test the extension of the play into South Andaman ▪ 2022 Timpan-1 gas discovery de-risked a multi-TCF gas play ▪ Significant discovery at Layaran Q4 2023 – Extensive gas column enco
Slide 18: Financial review and 2024 guidance
Financial review and 2024 guidance Strong financial position and disciplined capital allocation
Slide 19: Greater flexibility around hedging strategy going forward
Greater flexibility around hedging strategy going forward Materially higher exposure to commodity prices, especially UK NBP, with hedging volumes set to reduce from 2024 Realised prices Hedging profile Volumes hedged, kboepd Lower realised pricing driven by fall in 80 commodity prices and historical
Slide 20: Building on our track record of rapid net debt reduction post M&A
Building on our track record of rapid net debt reduction post M&A… …whilst delivering material shareholder distributions Net debt Shareholder distributions $ million Annual $200m dividend2 supplemented with buybacks 3.0 Distributions made in year, $million Dividend Buyback 361 241 2.0 192 191 2021 2
Slide 21: Guidance and outlook
Guidance and outlook 2023 guidance 2023 actual 2024 guidance 2025 vs 2024 Outlook Production Production 2024 Production Production 185-200 kboepd 186 kboepd 150 -165 kboepd Operating cost Operating cost Operating cost Operating Cost $16/boe $16/boe c.$18/boe Total capex Total capex Total capex Total
Slide 22: Acquisition of Wintershall Dea asset portfolio
Acquistion of Wintershall Dea asset portfolio A transformational step in our journey
Slide 23: Overview of acquisition: A compelling transaction for Harbour
Overview of acquisition: A compelling transaction for Harbour Acquisition of substantially all Wintershall Dea’s upstream assets for $11.2 bn (effective date 30 June 2023) Wintershall Dea’s upstream assets in Norway, Germany, Acquisition Funding structure Denmark1, Argentina, Mexico, Egypt, Libya2 a
Slide 24: Compelling strategic and financial rationale
Acquisition of Wintershall Dea asset portfolio: Compelling strategic and financial rationale Transforms Harbour into a large, geographically diverse O&G company while maintaining financial strength 1 ▪ Production >500 kboed1; 2P reserves 1.5 bnboe2 Scale and ▪ Geographic diversification, OECD weight
Slide 25: Scale and geographic diversification, material positions in established O&G basins
1 Scale and geographic diversification, material positions in established O&G basins Material production in the UK, Norway and Argentina, plus growth opportunities in Norway, Mexico, and Indonesia YE 2022 2P Reserves1 YE 2022 2C Resources1 bnboe bnboe Norway 7 8 8 1 6 4 UK 1 7 Denmark Germany 5 1.5
Slide 26: Acquisition in line with Harbour's stated M&A criteria
2 Acquisition of high quality and resilient portfolio in line with Harbour’s stated M&A criteria The acquisition is accretive to Harbour across key operational metrics H1 2023 Operating costs1 YE 2022 2P Reserve life2 YE 2022 2C Resources3 $/boe Years bnboe >25% 15 >200% >30% 1.5 8 11 6 0.5 Harbour
Slide 27: Acquisition supports our net zero and energy transition goals
3 Acquisition supports our net zero and energy transition goals Producing oil and gas responsibly and deploying our skills and infrastructure to accelerate CCS A shift towards natural gas Attractive NW Europe CCS portfolio with potential to provide % of YE 2022 2P reserves and 2C resources which is
Slide 28: Transaction expected to transform Harbour's corporate financing model
4 Transaction expected to transform Harbour’s corporate financing model into… …a lower cost and more flexible structure through porting of bonds and expected IG credit ratings Funding structure A new $3.0 bn unsecured RCF with an LC sublimit of $1.75 bn RCF ▪ Fully underwritten 5-year facility ▪ Sig
Slide 29: Harbour to be well-placed amongst long-established global independent O&G companies
Harbour to be well-placed amongst long-established global independent O&G companies Acquisition transforms Harbour into a large-scale, global independent with a new peer group Production H1 2023 Working interest, kboepd1 Norwegian independents Pro forma UK listed independents Harbour US independents
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Slide 31: Production and hedging position
Production and hedging position Group production Hedging schedule (as at 31 December 2023) Net, kboepd As at December 2023 2023 2022 2023 2024 2025 2026 Volume Average Volume Average Volume Average Volume Average GBA 27 31 price price (mmboe) price mmboe price J-Area 34 30 UK gas mmboe p/therm mmboe
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