Harbour Energy Plc · LSE:HBR
Harbour Energy — Investor Presentation (June 2023)
24 slides from Harbour Energy's investor presentation, June 2023
Slide 1: Investor Presentation
Investor Presentation Harbour Energy plc June 2023
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: Harbour at a glance
Harbour at a glance A global independent O&G company Norway 185-200 kboepd UK (2023 guidance) Mexico Mexico c.$16/boe1 865 mmboe2 Vietnam Vietnam Operating cost 2P reserves + 2C (2023F) resources (YE 2022) c.$1.1 bn1 $1.0 bn1,3 Indonesia Total capex (inc.decom) Free cash flow (2023F) (2023F) 0.2x4 N
Slide 4: Strategy recap
Strategy recap Continue building a global diversified independent oil and gas company ▪ Ensure safe, reliable and environmentally responsible operations ▪ Maintain a high quality portfolio of reserves and resources ▪ Leverage our full cycle capability to diversify and grow further ▪ Ensure financial
Slide 5: Q1 2023 highlights – a strong first quarter
Q1 2023 highlights – a strong first quarter Delivering on our strategy of building a global diversified O&G company A robust base business Good momentum on growth / Strong financial position and diversification projects disciplined capital allocation ▪ Q1 production of 202 kboepd ▪ International pro
Slide 6: A focus on safe and responsible operations
A focus on safe and responsible operations Safety is our top priority Improved occupational safety record TRIR (per million hours worked)1 Improved process safety performance Events (Tier 1 and Tier 2)1 Tier 1 Tier 2 Q1 2023 Safety highlights ▪ No significant injuries or process safety events ▪ Cont
Slide 7: Diverse production base with a good balance of oil and gas
Diverse production base with a good balance of oil and gas Q1 production of 202 kboepd, on target to meet full year guidance of 185-200 kboepd Production ▪ Significant asset diversification kboepd 208 kboepd 202 kboepd ▪ Robust margins Other UK 200 Beryl Other UK ▪ Material interests in major UK hub
Slide 8: An efficient operator with robust margins…
An efficient operator with robust margins… …with opportunities to remain competitive in a challenging operating environment Q1 2023 production above the top end of Higher unit cost in Q1 2023 driven by full year 2023 guidance with minimal reduced volumes and stronger sterling planned shutdowns offse
Slide 9: 2023 production is forecast at 185-200 kboepd …
2023 production is forecast at 185-200 kboepd … … with new wells coming onstream partially offsetting natural decline Production kboepd 2023 Guidance 225 208 kboepd 185-200 kboepd 175 kboepd Tolmount 150 75 202 kboepd Q1 2023 0 2021 Full year PMO Natural Production New 2022 Natural Production New 20
Slide 10: Maximising value of our UK portfolio through targeted investment…
Maximising value of our UK portfolio through targeted investment… …and realising the upside of our existing assets Improving recovery factor Converting 2C resource into 2P reserves ▪ Infill drilling and well interventions ▪ Near-field satellite tie-backs ▪ Application of production technology ▪ Prio
Slide 11: 2022 Year-end reserves and resources
2022 Year-end reserves and resources Reflects Indonesia exploration success offset by production and UK Growing international portfolio 2P reserves, 2C resources, net, mmboe licence relinquishments 2C contingent resources, net, mmboe3 Int’l2 2C resources UK 2C resources 948 1000 mmboe 865 mmboe 47%
Slide 12: Growing portfolio of international development opportunities…
Growing portfolio of international development opportunities… …provide potential for material reserves replacement Norway Mexico: Zama c.100 mmboe 2C ▪ 3,160 km2 of exploration acreage ▪ 12.39% non-operated interest ▪ 2x wells in 2023 (JDE, Ringhorne) 410 mmboe ▪ FDP approved by the regulator 2P res
Slide 13: Andaman Sea: potential opening of a major gas province in region of growing demand
Andaman Sea: potential opening of a major gas province in region of growing demand 2022 Harbour operated Timpan-1 exploration well (HBR 40%) de-risks multiple prospects across Andaman Sea acreage ▪ 3 well programme – Layaran, Halwa and Gayo Well positioned to access major natural gas markets ▪ Drill
Slide 14: 2023 drilling programme is H2 weighted
2023 drilling programme is H2 weighted Converting UK 2P reserves into production and targeting significant resource additions internationally 2023 Q1 2024 Targeting attractive metrics North Sea Today J-Area J06 x3 Talbot Joc. S <$35/bbl GBA Leverett Callanish F6 Break-even oil price Tolmount Area To
Slide 15: Strategic ambition to grow and diversify internationally via M&A
Strategic ambition to grow and diversify internationally via M&A M&A must be competitive with organic investments, safeguarding the balance sheet and shareholder returns Supportive environment Disciplined and value Delivering shareholder value through and proven capability focussed criteria accretiv
Slide 16: Addressing our environmental impact and playing a key role in the energy transition
Addressing our environmental impact and playing a key role in the energy transition Pathway to achieving Net Zero by 2035 further clarified ▪ Progressing wide range of activities to reduce emissions 2022 highlights ▪ Net Zero goal embedded within our investment decisions, interim target set ▪ Emissi
Slide 17: Responsibly decommissioning O&G infrastructure which cannot be repurposed for CCS
Responsibly decommissioning O&G infrastructure which cannot be repurposed for CCS Our decommissioning team delivered a strong safety, environmental and cost performance in 2022 ▪ Seven wells decommissioned and seven platforms removed in 2022 Heavy lift campaign to remove Vulcan RD in 2022 ▪ On-going
Slide 18: Strategically located in the Humber, the UK's most CO2 intensive region
Strategically located in the Humber, the UK’s most CO2 intensive region Uniquely positioned to deploy skills and infrastructure to accelerate CCS Highlights Collaboration with ABP provides Viking access to shipped emissions ▪ Viking 300mt contingent CO2 storage independently audited (UK and imports)
Slide 19: Delivering against our capital allocation priorities
Delivering against our capital allocation priorities A conservative financial framework Safeguard balance sheet Ensure a robust & diverse portfolio Deliver shareholder returns ▪ Target leverage of <1.5x on average ▪ Focused investment to underpin cash ▪ Track record of returning excess through the c
Slide 20: Increased opportunistic hedging strategy while continuing to protect the downside
Increased opportunistic hedging strategy while continuing to protect the downside Incremental additions of attractively priced gas hedges for 2024 and 2025 Oil price, $/bbl Hedged volumes, kboepd Av. hedged oil price $/bbl Av. hedged gas price p/therm1 UK gas price, pence/therm Greater flexibility w
Slide 21: Robust balance sheet and significant cash generation
Robust balance sheet and significant cash generation Building a track record of rapid net debt reduction post M&A and delivering material shareholder distributions Net debt Strong dividend per share (DPS) growth $ million c.$1.0 bn Cents/share 9% dps growth 2023 forecast FCF1 at $85/bbl, 150p/therm
Slide 22: 2023 guidance reiterated
2023 guidance reiterated 2022 actual 2023 guidance 2023 Q1 actual Production Production Production 208 kboepd 185-200 kboepd 202 kboepd Operating cost Operating cost Operating cost $14/boe c.$16/boe $15/boe Total capex Total capex Total capex $0.9 billion c.$1.1 billion $0.2 billion Harbour Energy |
Slide 23: Well positioned for value creation, growth and shareholder returns
Well positioned for value creation, growth and shareholder returns Pure-play upstream, global oil and gas producer ▪ High quality, diverse cash generative portfolio ▪ Attractive international growth opportunities ▪ Track record of disciplined, value-accretive M&A ▪ Well positioned to play a signific
Slide 24: Investor relations contact
+44 (0)1224 086000 investor.relations@harbourenergy.com www.harbourenergy.com