Harbour Energy Plc · LSE:HBR
Harbour Energy — FY2023 Earnings Presentation
33 slides from Harbour Energy's earnings presentation, Mar 7, 2024
Slide 1: 2023 Full Year Results
Harbour Energy plc 2023 Full Year Results March 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: Agenda
Agenda 1. 2023 highlights 2. Operational review 3. 2023 financial review and 2024/2025 outlook 4. Acquisition of Wintershall Dea asset portfolio 5. Concluding remarks Harbour Energy | 2023 Full Year Results 2
Slide 4: 2023 highlights
2023 highlights Advancing our strategy
Slide 5: 2023 highlights: Advancing our strategy
2023 highlights Advancing our strategy Maximising value of our production base c.500 kboepd ▪ Top quartile safety performance ▪ Reserve additions at UK operated hubs International growth and diversification ▪ >25% growth in international 2C resource ▪ Increased momentum on CCS projects Strong financ
Slide 6: Operational review
Operational review Maximising the value of our production base
Slide 7: 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 serious process safety events during 2023 Strong occupational safety record Improved process safety performance TRIR (per million hours worked)1 Events (Tier 1 and Tier 2)1,2 Tier 2 Tier
Slide 8: Addressing our environmental impact
Addressing our environmental impact Producing oil and gas responsibly 2018 2023 highlights GHG emissions Harbour has a steady UK programme of decommissioning wells and infrastructure mt CO2e (gross, operated, Scope 1 and 2) c.30% 2025 <0.2% Methane Intensity1 2030 Zero routine flaring 1.8 50% reduct
Slide 9: Production of 186 kboepd underpinning significant free cash flow generation
Production of 186 kboepd underpinning significant free cash flow generation Strong performance from our operated UK hubs offset by deferred partner wells and extended planned shutdowns Production kboepd 2023 Production 200 208 186 175 150 Balance of oil and gas kboepd 100 2023 UK gas Int'l gas Oil N
Slide 10: A proactive operator with competitive operations well placed for further growth
A proactive operator with competitive operations well placed for further growth Leveraging our scale in the UK and removing complexity to control our cost base Fewer contracts and suppliers, more strategic partnerships Creating an efficient & scalable business Number ▪ Additional long-term supplier
Slide 11: Investing in high-return, short cycle UK opportunities to support production and cash flow
Investing in high-return, short cycle UK opportunities to support production and cash flow UK investment has to compete for capital with other investment opportunities, shareholder returns and debt reduction UK capital investment (excl. decom) Production broadly stable from our three $bn largest ope
Slide 12: 2024 production reflects high level of planned shutdowns and timing of new wells on-stream
2024 production reflects high level of planned shutdowns and timing of new wells on-stream 2025 production expected to be similar to 2024 with increased volumes from new wells and fewer planned outages Production kboepd Impacted by deferred Increased volumes from 2024 guidance drilling at non-operat
Slide 13: Increased total reserves and resources to 880 mmboe
Increased total reserves and resources to 880 mmboe 2P reserve additions at UK operated hubs and growth in international 2C resources offset by production Total 2P reserves and 2C resources Track record of 2P reserve additions from acquisitions mmboe1 mmboe 865 880 834 >25% 2P reserves 659 Cumulativ
Slide 14: Growing set of attractive, international growth projects
Growing set of attractive, international growth projects… …with the potential to materially add to our reserves and production and diversify our portfolio overtime c.95 mmboe 2C Indicative reserve additions Mexico: Zama Norway mmboe ▪ 12.4% non-operated interest ▪ Small gas discovery at Ametyst 519
Slide 15: Progressing Viking CCS to a final investment decision
Progressing Viking CCS, a scalable transportation & storage network, to a final investment decision Critical for the UK’s transition to a lower carbon economy & offers Harbour a potential long term, stable income stream Leading UK CO2 Working with mature Located to serve both UK and European markets
Slide 16: 2023 financial review and 2024/2025 outlook
2023 financial review and 2024/2025 outlook Strong financial position and disciplined capital allocation
Slide 17: Sustained operational & financial delivery and disciplined capital allocation
Sustained operational & financial delivery and disciplined capital allocation Since becoming a public company in 2021, we have generated $3.8 billion of free cash flow Safeguarding the balance sheet Ensuring a robust and resilient portfolio Competitive shareholder returns Net debt, $bn Capex, $bn Di
Slide 18: Income statement
Income statement Strong operating margins with profitability impacted by high effective tax rate $ million 2023 2022 Revenue and EBITDAX lower mainly due to lower realised post- 3,751 hedging UK natural gas prices (2023: 54p/therm; 2022: 86p/therm) Revenue & other income 5,431 and lower production v
Slide 19: Balance sheet
Balance sheet Balance sheet significantly de-levered and equity increased Assets YE 2023 YE 2022 Equity and liabilities YE 2023 YE 2022 $ million $ million $ million $ million Goodwill 1,302 1,327 Other intangible assets 1,172 880 Equity 1,540 1,021 Property, plant and equipment 4,717 5,690 Borrowin
Slide 20: Significant cash generation underpinned by robust operational performance
Significant cash generation underpinned by robust operational performance… …allowed for continued investment, material shareholder distributions and net debt reduction Net debt / cash flow Significant liquidity at 31 Dec 2023 $bn ▪ Successful amendment and extension of $1 billion the RBL on favourab
Slide 21: Significantly higher free cash flow expected in 2025
Significantly higher free cash flow expected in 2025… …driven by materially lower capital expenditure and improved gas hedging profile Hedging profile2 2024 2025 vs 2024 Volumes hedged Gas: hedged production, avg. hedged price3 (p/therm) Guidance kboepd Oil: hedged production, avg. hedged oil price
Slide 22: Acquisition of Wintershall Dea asset portfolio
Acquisition of Wintershall Dea asset portfolio A transformational step in our journey
Slide 23: Overview of acquisition
Overview of acquisition Acquisition of substantially all Wintershall Dea’s upstream assets for $11.2 bn (effective date 30 June 2023) Acquisition Funding structure Wintershall Dea’s upstream assets in Norway, Germany, 3 Equity Denmark, Argentina, Mexico, Egypt, Libya and Algeria1 Harbour shares issu
Slide 24: The Acquisition is expected to be accretive across all key metrics
The Acquisition is expected to be accretive across all key metrics… …underpinning expected investment grade credit ratings and sustainable, enhanced shareholder returns Production1 Unit operating costs2 GHG emissions intensity3 Annual dividend4 kboepd $/boe kgCO2e/boe Cents / ordinary share >5% >150
Slide 25: 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 2023 Production kboepd1 Norwegian independents Pro forma UK listed independents Harbour US independents WDEA 500 250 0 Aker
Slide 26: Acquisition on track for completion during Q4 2024
Acquisition on track for completion during Q4 2024 Substantially all regulatory, anti-trust and FDI approvals for completion submitted and progressing as expected 4 Filings Approvals Target submitted received completion 0% 100% 0% 100% Acquisition announcement December 2023 Oversubscribed syndicatio
Slide 27: Concluding remarks
Concluding remarks Well positioned for value creation
Slide 28: Building a global, diversified oil and gas company via disciplined M&A
Building a global, diversified oil and gas company via disciplined M&A Well-positioned for value creation, growth and shareholder returns 2024 priorities c.500 kboepd Maximize the value of our production base responsibly Progress international growth and diversification opportunities Maintain strong
Slide 29: Appendix
Appendix |
Slide 30: Production and hedging position
Production and hedging position Group production Hedging schedule Net, kboepd As at 31 December 2023 2023 2022 2024 2025 2026 Volume Average Volume Average Volume Average GBA 27 31 price price price J-Area 34 30 mmboe p/therm mmboe p/therm mmboe p/therm AELE hub 22 27 UK gas 13.1 67 7.4 90 1.6 99 Ca
Slide 31: Free cash flow sensitivity and tax movements
Free cash flow sensitivity and tax movements 2024 free cashflow sensitivity 2023/2024 Tax $bn $bn International 2023 liability paid in 2024 0.2 1.0 Tax liability paid in year 0.1 0.5 0 0.0 $85/bbl, 100p/therm 85/bbl, 70p/therm 2023 tax liability 2024 tax paid 1 2024 free cash flow expected to be mar
Slide 32: 2024 drilling programme: maximising the value of our portfolio
2024 drilling programme: maximising the value of our portfolio 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 Callanish F6 Gilderoy Brodgar N&E AELE NW Seymour Clair
Slide 33: i Harbour
i Harbour mmm Energy