Harbour Energy Plc · LSE:HBR
Harbour Energy — FY2021 Earnings Presentation
26 slides from Harbour Energy's earnings presentation, Mar 17, 2022
Slide 1: 2021 Annual Results
2021 Annual Results Harbour Energy plc 17 March 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: 2021 Highlights
Highlights Operations Finance Outlook 2021 Highlights Completion of merger with Premier; realisation of synergies progressing as planned Production of 175 kboepd Strong Q4 production of 214 kboepd following completion of maintenance programmes Opex of $15.2/boe and total capex of $935 million, lower
Slide 4: Operational overview
Operational overview Linda Z Cook
Slide 5: Safety is our top priority
Highlights Operations Finance Outlook Safety is our top priority Standardised safety-related policies and procedures, adopting best practice Judy and Britannia (UK) surpassed 7 years and Gajah Baru (Indonesia) 10 years without a LTIR1 Established clear priorities: Process Safety and Lifesaving R
Slide 6: Successful completion of merger with Premier
Highlights Operations Finance Outlook Successful completion of merger with Premier… … and integration and realisation of synergies progressing as planned Shares subject to lock-up Scale 31 Mar 21 Largest UK listed independent O&G Company 30 Sep 21 Member of FTSE 250 1 Apr 22 Shares subject to lo
Slide 7: 2021 Production of 175 kboepd
Highlights Operations Finance Outlook 2021 Production of 175 kboepd Production increased to 214 kboepd in Q4 Full contribution from Premier portfolio Production Extended maintenance shutdowns complete kboepd Strong operational performance Premier Maintenance c.90% 250 Drilling activity retur
Slide 8: 2022 Production up c.15% due to full year from Premier
Highlights Operations Finance Outlook 2022 Production up c.15% due to full year from Premier, new wells on-stream and improved uptime Production kboepd Up c.15% 2022 Guidance at guidance mid-point 195-210 kboepd 250 2021 175 kboepd 200 150 J-Area AELE 100 Buzzard Catcher Area SE Asia 50 20
Slide 9: Tolmount: Start-up operations underway
Highlights Operations Finance Outlook Tolmount: Start-up operations underway Tolmount: Will increase UK domestic gas production by 6% ATEX inspection and repair campaign concluded Testing and commissioning of platform largely complete Start-up underway, key steps include: Platform handover to ODE
Slide 10: 2022 Activities: prioritising our best capital projects
Highlights Operations Finance Outlook 2022 Activities: prioritising our best capital projects Short cycle, high value opportunities to maintain production while generating material free cash flow 2022 Drilling & Intervention Schedule Q1 Q2 Q3 Q4 Almost all 2022 drilling & development projects breake
Slide 11: International growth opportunities
Highlights Operations Finance Outlook International growth opportunities … … which could add materially to our future production Tuna, Indonesia: Zama, Mexico: Andaman, Indonesia: Positive appraisal results Robust economics, long life field Potential multi TCF gas play Extensive data acquisition p
Slide 12: GHG emissions – progress towards Net Zero 2035
Highlights Operations Finance Outlook GHG emissions – progress towards Net Zero 2035 Key achievements in 2021 NetZero GHG intensity (Scope 1 and2035 2) Measure kgCO2e/boe Standardised base line emissions Increased climate reporting via TCFD, CDP, SASB 25 Reduce 23 Emissions of 1.6 mtCO2e, 6% l
Slide 13: Financial results and guidance
Financial results and guidance Alexander Krane
Slide 14: Delivering against our capital allocation priorities
Highlights Operations Finance Outlook Delivering against our capital allocation priorities Safeguard balance sheet Ensure a robust & diverse portfolio Deliver shareholder returns Targeting leverage of less than 1.5x Focused investment to underpin cash Aim to deliver both growth and through the
Slide 15: Increased flexibility around hedging as leverage reduces
Highlights Operations Finance Outlook Increased flexibility around hedging as leverage reduces Increased exposure to commodity prices in 2022 with higher production and less hedging Hedging position1, production kboepd Hedged oil Hedged oil price ($/bbl) Unhedged oil Unhedged NGLs Hedged UK gas Hedg
Slide 16: Income statement
Highlights Operations Finance Outlook Income statement Return to profitability and increased operating margins1 Realised pricing $ million FY 2021 FY 2020 $/boe; pence/therm 83 Revenue & other income 3,618 2,438 63 Cost of operations (976) (707) 59 54 50 DD&A (1,371) (1,222) 33 Other cost of sales (
Slide 17: Statement of financial position at year end
Highlights Operations Finance Outlook Statement of financial position at year end A robust balance sheet underpinned by a well funded financial profile and prudent capital allocation Assets YE 2021 YE 2020 Equity and liabilities YE 2021 YE 2020 $ million $ million $ million $ million Goodwill 1,327
Slide 18: Net debt and Cash flow statement
Highlights Operations Finance Outlook Net debt and Cash flow statement Harbour generated $678 million of free cash flow in 2021, up c. 20% versus 2020 $ million 3,000 $1.3 billion net debt draw down, principally to fund merger Tax paid includes a Chrysaor 2,000 2020 liability as well as being in
Slide 19: Increased production and commodity prices to drive higher free cash flow in 2022
Highlights Operations Finance Outlook Increased production and commodity prices to drive materially higher free cash flow in 2022 Net debt $ million 2022 forecast FCF1 A diversified capital structure 3,000 10% $1.5bn-$1.7bn $4.5 billion RBL, including sub-limit of $1.25 billion for Letters of Cred
Slide 20: Three year (2022-2024) capital allocation outlook
Highlights Operations Finance Outlook Three year (2022-2024) capital allocation outlook Well placed to deliver value creation, growth and shareholder returns CMD price assumptions1 Illustrative three year capital allocation Over 2022-2024, Harbour’s business: $m Current price sensitivity2 Delivers
Slide 21: Guidance
Highlights Operations Finance Outlook Guidance 2021 Guidance1 2021 Actual1 2022 Guidance Production 170-180 175 195-210 kboepd kboepd kboepd Operating Cost 15-16 15.2 15-16 $/boe $/boe $/boe 709 1,000 P&D and E&A Capex $m $m 1.1 $bn Decommissioning 226 300 expenditure $m $m 1 2021 numbers are provid
Slide 22: Outlook
Outlook Linda Z Cook
Slide 23: 2022 Outlook
Highlights Operations Finance Outlook 2022 Outlook Production of 195-210 kboepd, a c.15% increase versus 2021 Production of 219 kboepd to end February Tolmount (UK): start-up underway; initial rates of c. 20 kboepd (net) expected Opex and total capex guidance unchanged at $15-16/boe and $1.3 billion
Slide 24: A unique investment opportunity
Highlights Operations Finance Outlook Well positioned for value creation Pure play, upstream, Diverse, cash Positioning for the global O&G company generative producing energy transition portfolio of scale A unique investment opportunity Conservative financial Commitment to Track record of creating r
Slide 25: Q&A
Highlights Operations Finance Outlook Q&A Linda Z. Cook Alexander Krane Chief Executive Officer Chief Financial Officer Stuart Wheaton Bob Fennell EVP International EVP North Sea Harbour Energy plc 25 2021 Annual Results| March 2022
Slide 26: Investor relations contact
+44 (0)1224 086000 investor.relations@harbourenergy.com www.harbourenergy.com