Harbour Energy Plc · LSE:HBR
Harbour Energy — H1 2022 Earnings Presentation
26 slides from Harbour Energy's earnings presentation, Aug 25, 2022
Slide 1: 2022 Half Year Results
2022 Half Year Results Harbour Energy plc 25 August 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: Agenda
Agenda 1. H1 2022 Highlights 2. Operational review 3. Financial review and guidance 4. Summary and outlook Harbour Energy plc 2 2022 Half Year Results
Slide 4: H1 2022 Performance: Delivering against our strategy
H1 Highlights Operational review Financial review and guidance Summary 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 financial Sig
Slide 5: Operational review
Operational review Linda Z Cook
Slide 6: A focus on safe and responsible operations
H1 Highlights Operational review Financial review and guidance Summary 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) scaffol
Slide 7: A diversified production base of scale
H1 Highlights Operational review Financial review and guidance Summary 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 through
Slide 8: Strong H1 operational performance
H1 Highlights Operational review Financial review and guidance Summary 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 H1 2022
Slide 9: Increased drilling rig activity planned for H2 2022
H1 Highlights Operational review Financial review and guidance Summary 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 programme
Slide 10: Continued investment in organic portfolio opportunities – UK and International
H1 Highlights Operational review Financial review and guidance Summary 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: high r
Slide 11: Material gas discovery in Andaman Sea, Indonesia
H1 Highlights Operational review Financial review and guidance Summary 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 high net
Slide 12: Ambition to grow and diversify internationally
H1 Highlights Operational review Financial review and guidance Summary 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 ▪ Accretive
Slide 13: Addressing our environmental impact
H1 Highlights Operational review Financial review and guidance Summary 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 reduce em
Slide 14: Harbour is participating in two early stage CCS projects in the UK
H1 Highlights Operational review Financial review and guidance Summary 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 aims to
Slide 15: Financial review and guidance
Financial review and guidance Alexander Krane
Slide 16: H1 2022 Financial highlights
H1 Highlights Operational review Financial review and guidance Summary 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 $m 82 69
Slide 17: Income statement: Increased profit underpinned by robust operational performance
H1 Highlights Operational review Financial review and guidance Summary 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 Higher
Slide 18: Balance sheet
H1 Highlights Operational review Financial review and guidance Summary 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 $ million Goodw
Slide 19: Strengthened financial position during the first half
H1 Highlights Operational review Financial review and guidance Summary 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 costs and d
Slide 20: H1 performance supports improved free cash flow generation outlook
H1 Highlights Operational review Financial review and guidance Summary H1 performance supports improved free cash flow generation outlook Narrowing production guidance and lowering capex guidance Material optionality over future offsets impact of UK Energy Profits Levy (EPL) capital allocation ▪ For
Slide 21: Shifting hedging strategy to increase exposure to market pricing
H1 Highlights Operational review Financial review and guidance Summary 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 flexibility w
Slide 22: Guidance
H1 Highlights Operational review Financial review and guidance Summary 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 800 (as at
Slide 23: Summary
Summary Linda Z Cook
Slide 24: Why Harbour Energy?
H1 Highlights Operational review Financial review and guidance Summary 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 asset base
Slide 25: Contact details
+44 (0)1224 086000 investor.relations@harbourenergy.com www.harbourenergy.com
Slide 26: H1 2022 Production; latest hedging position
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 Elgin Franklin 19.3 26 13 Catcher 50 21 12 Buzzard 21.7 15 12 West of Shetlands