Harbour Energy Plc · LSE:HBR
Harbour Energy — Investor Presentation (September 2022)
28 slides from Harbour Energy's investor presentation, September 2022
Slide 1: Investor Presentation
Investor Presentation Harbour Energy plc September 2022
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: Evolution of Harbour
Introduction Operational review Financial review and guidance Summary Appendix Evolution of Harbour 211 kboepd 175 kboepd1 137 kboepd 17 kboepd ConocoPhillips Largest UK listed Harbour founded by Shell transaction Premier merger transaction completed independent O&G Co2 private equity completed Q4 c
Slide 4: Harbour at a glance
Introduction Operational review Financial review and guidance Summary Appendix Harbour at a glance A FTSE100 global Independent O&G company Norway c.200 kboepd UK (2022-2024) Mexico Vietnam $15-16/boe 948 mmboe Operating cost1 2P reserves + 2C (2022F) resources2 (YE 2021) Indonesia c.$1.2 bn1 $1.8-2
Slide 5: Strategy
Introduction Operational review Financial review and guidance Summary Appendix Strategy To continue building a mid to large-sized, diversified global independent oil & gas company ▪ Ensure safe, reliable and environmentally responsible operations ▪ Retain a large diversified portfolio of production,
Slide 6: Harbour's strategic scope
Introduction Operational review Financial review and guidance Summary Appendix Harbour’s strategic scope Harbour will… Harbour will not… Focus on upstream oil and gas production Invest in non-strategic midstream, power, renewables Grow to at least two regions of scale Stay of scale in one region, ac
Slide 7: Highly experienced board
Introduction Operational review Financial review and guidance Summary Appendix Highly experienced board Blair Thomas Chairman n Simon Henry Senior Non-Executive Director i a h ▪ >30 years' experience in investment management ▪ 35 years in an executive career with Shell, retiring as CFO & Executive D
Slide 8: H1 2022 Performance: Delivering against our strategy
Introduction Operational review Financial review and guidance Summary Appendix H1 2022 Performance: Delivering against our strategy Building a global and diversified oil and gas company focused on safe and responsible operations, value creation and shareholder returns Strong operational Robust finan
Slide 9: A focus on safe and responsible operations
Introduction Operational review Financial review and guidance Summary Appendix A focus on safe and responsible operations Safety is our top priority ▪ No significant injuries or spills during the period ▪ Improved safety performance ▪ Summer shutdowns largely complete – safely, on schedule Judy (UK)
Slide 10: A diversified production base of scale
Introduction Operational review Financial review and guidance Summary Appendix A diversified production base of scale Harbour delivers c. 15% of the UK’s O&G production and is the largest producer and investor in the UK today ▪ H1 2022 production of 211 kboepd, over 90% from the UK Growth delivered
Slide 11: Strong H1 operational performance
Introduction Operational review Financial review and guidance Summary Appendix Strong H1 operational performance Production up 40%, driven by full Premier contribution, improved production efficiency1 and new wells on-stream Production kboepd 2022 Guidance Improved efficiency narrowed % 250 H1 2021
Slide 12: Increased drilling rig activity planned for H2 22
Introduction Operational review Financial review and guidance Summary Appendix Increased drilling rig activity planned for H2 2022 Short cycle, high value opportunities to maintain production while generating material free cash flow Today 2022 2023 Disciplined capital investment H1 H2 Q1 NORTH SEA p
Slide 13: Continued investment in organic portfolio opportunities – UK and International
Introduction Operational review Financial review and guidance Summary Appendix Continued investment in organic portfolio opportunities – UK and International Maintain highly cash generative, UK Portfolio J-Area: Talbot FID GBA: Leverett appraisal sanctioned Tolmount: Increases UK gas supply ▪ Talbot
Slide 14: Material gas discovery in Andaman Sea, Indonesia
Introduction Operational review Financial review and guidance Summary Appendix Material gas discovery in Andaman Sea, Indonesia Timpan-1 gas discovery ▪ Play opening Timpan-1 well ▪ Significantly de-risks multiple prospects across Harbour’s Andaman Sea acreage ▪ Encountered 390 foot gas column in a
Slide 15: Ambition to grow and diversify internationally
Introduction Operational review Financial review and guidance Summary Appendix Ambition to grow and diversify internationally M&A – like other investment – must compete for capital with safeguarding the balance sheet and shareholder returns Criteria: ▪ Material, cash generative producing assets ▪ Ac
Slide 16: Addressing our environmental impact
Introduction Operational review Financial review and guidance Summary Appendix Addressing our environmental impact Taking action to achieve our Net Zero goal by 2035 Asset decarbonisation ▪ Scope 1 and 2 emissions intensity materially improved in H1 2022 ▪ Progressing a wide range of activities to r
Slide 17: Harbour is participating in two early stage CCS projects in the UK
Introduction Operational review Financial review and guidance Summary Appendix Harbour is participating in two early stage CCS projects in the UK Harbour is well positioned to deploy its skills and infrastructure to accelerate CCS The UK’s largest clusters by industrial emissions ▪ The UK government
Slide 18: Strong cash generation through the cycle
Introduction Operational review Financial review and guidance Summary Appendix Strong cash generation through the cycle… ...underpinned by prudent capital allocation and a robust financial framework A reliable and safe operator A strong focus on managing costs High quality forward investment portfol
Slide 19: H1 2022 Financial highlights
Introduction Operational review Financial review and guidance Summary Appendix H1 2022 Financial highlights Robust financial results underpinned by strong operational performance and improved realised prices Higher realised pricing Reduced unit operating costs Increased EBITDAX $/bbl, p/therm $/boe
Slide 20: Strengthened financial position during the first half
Introduction Operational review Financial review and guidance Summary Appendix Strengthened financial position during the first half Higher production, Strong Significant liquidity realised prices cash flows of >$2 billion $ million $ million $1.2 billion of FCF after tax, capex, 2,000 financing cos
Slide 21: Material optionality over future capital allocation
Introduction Operational review Financial review and guidance Summary Appendix Material optionality over future capital allocation with potential to be net debt free in 2023 H1 performance supports improved free cash flow Proven track record of rapid pay down post generation outlook acquisitions $ b
Slide 22: Shifting hedging strategy to increase exposure to market pricing
Introduction Operational review Financial review and guidance Summary Appendix With low leverage, shifting hedging strategy to increase exposure to market pricing… ...while continuing to protect the downside Hedged volumes reduce materially over next 3 years Recent oil hedging prices ▪ Greater flexi
Slide 23: Guidance
Introduction Operational review Financial review and guidance Summary Appendix Guidance Free cash flow is first half weighted due to timing of capex, tax payments and shareholder returns Production Total capex 2022 H1 2022 2022 kboepd kboepd Guidance (Actual) Guidance Liquids Gas UK International 80
Slide 24: Why Harbour Energy?
Introduction Operational review Financial review and guidance Summary Appendix Why Harbour Energy? Well positioned for value creation, growth and shareholder returns ▪ Pure-play, upstream global O&G producer ▪ A focus on safe and responsible operations ▪ High quality, diversified cash generative ass
Slide 25: H1 2022 Production; latest hedging position
Introduction Operational review Financial review and guidance Summary Appendix H1 2022 Production; latest hedging position (as at 18 August 2022) Group Production Equity (%) H1 2022 (net, kboepd) H1 2021 (net, kboepd) Greater Britannia Area 26.3-93.8 33 28 J-Area 67-67.5 28 27 AELE hub 32-100 28 23
Slide 26: Income statement: Increased profit underpinned by robust operational performance
Introduction Operational review Financial review and guidance Summary Appendix Income statement: Increased profit underpinned by robust operational performance Hedging enables us to be financially strong and invest through the cycle but limits exposure to recent high prices $ million H1 2022 H1 2021
Slide 27: Balance sheet
Introduction Operational review Financial review and guidance Summary Appendix Balance sheet Strong balance sheet; unrealised hedging losses to reverse and crystallise against future revenue over time Assets H1 2022 YE 2021 Equity and liabilities H1 2022 YE 2021 $ million $ million $ million $ milli
Slide 28: Contact
+44 (0)1224 086000 investor.relations@harbourenergy.com www.harbourenergy.com
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