Harbour Energy Plc · LSE:HBR
Harbour Energy — H1 2021 Earnings Presentation
33 slides from Harbour Energy's earnings presentation, Sep 23, 2021
Slide 1: Half Year Results
Half Year Results 23 September 2021
Slide 2: Disclaimer
DISCLAIMER IMPORTANT NOTICE: THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE BEING SUPPLIED TO YOU FOR YOUR INFORMATION ONLY AND ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY TO ANY OTHER PERSON. BY ACCESSING THIS DOCUMENT YOU AGREE TO BE B
Slide 3: Agenda
AGENDA 1. Strategy and H1 highlights 2. Operational review 3. Financial performance 4. Wrap-Up 2 Half Year Results| 23 September 2021
Slide 4: Strategy
STRATEGY To continue building a global, diversified oil & gas company Ensure safe, reliable and environmentally responsible operations Retain a large diversified portfolio of production, reserves and resources – Maximise value from cash generative UK asset base – Diversify and deliver growth thr
Slide 5: Harbour's Strategic Scope
HARBOUR’S STRATEGIC SCOPE Harbour will… Harbour will not… Focus on upstream oil and gas production Invest in midstream, infrastructure, power, renewables Grow to at least two regions of scale Stay of scale in one region, acquire multiple small positions Ensure a balance of oil and gas production Und
Slide 6: H1 Highlights: Delivering Against Our Strategy
H1 HIGHLIGHTS DELIVERING AGAINST OUR STRATEGY MERGER OPERATIONAL STRONG FINANCIAL STRATEGIC COMPLETED PROGRESS POSITION EXECUTION Integration progressing well Production impacted by Positive free cash flow Aligning portfolio with Synergies confirmed… maintenance and outages generation of $
Slide 7: Addressing the Energy Transition
ADDRESSING THE ENERGY TRANSITION MINIMISING CARBON EMISSIONS OFFSETS A COMMITMENT Improve plant operational efficiency Offset an increasing proportion of the TO ACHIEVING Minimise venting and flaring Group’s residual emissions year on year NET ZERO (SCOPE Incorporate best practice into new p
Slide 8: Agenda
AGENDA 1. H1 highlights and overview 2. Operational review 3. Financial performance 4. Wrap-Up 7 Half Year Results| 23 September 2021
Slide 9: H1 2021 Safety Performance
H1 2021 SAFETY PERFORMANCE Safety is the Company’s top priority Continue to manage the impact of COVID-19, applying appropriate measures and safeguards Focus on safe and reliable operations to prevent major accidents and to provide a high level of protection to the workforce Maintain the highe
Slide 10: H1 Group Reported Production Performance
H1 GROUP REPORTED PRODUCTION PERFORMANCE Group year to date daily production highs reached in September with maintenance now completed Reported Production kboepd H1 2021 Group Reported Production Oil 200 Gas 46% 150 151 kboepd 54% 100 187 Operated 151 159 185 210 Clair Non-operated EIS Schiehallion
Slide 11: H1 Maintenance Programmes Safely Concluded
H1 MAINTENANCE PROGRAMMES SAFELY CONCLUDED Group production efficiency lower in H1 2021 due to maintenance deferrals (now completed) Production efficiency1 % 100 H1 2020 H1 2021 Group 80 H1 2020: c.85% 60 40 Group 20 H1 2021 planned shutdowns aligned with deferred Forties Pipeline System (FPS) outag
Slide 12: Rising Group Production Profile into Year End
RISING GROUP PRODUCTION PROFILE INTO YEAR END… ... driven by increasing UK production Reported production kboepd Premier contribution 200 150 100 50 0 2016 2017 2018 2019 2020 H1 2021 H2 2021 est. Maintenance programmes completed Newly completed/re-instated wells expected on-stream Full contri
Slide 13: Operator of Key UK Hubs with Material Upside
OPERATOR OF KEY UK HUBS WITH MATERIAL UPSIDE J-Area – Multiple near field opportunities GBA – Third party and area volumes 27 kboepd net to end of June 28 kboepd net to end of June Active multi-year drilling and High operating efficiency workover programme Additional volumes from Jade So
Slide 14: Non-Operated UK Portfolio, High Quality Long Life Assets
NON-OPERATED UK PORTFOLIO, HIGH QUALITY LONG LIFE ASSETS Elgin-Franklin – Long life gas asset Beryl – Cross border Tertiary play Operated by Total Operated by Apache 13 kboepd net to end of June 13 kboepd net to end of June Production impacted by Drilling ongoing at Storr-2 unplanned GAE
Slide 15: Tolmount Start-up Expected Around Year End
TOLMOUNT START-UP EXPECTED AROUND YEAR END NEW OPERATED HUB IN THE SOUTHERN NORTH SEA During 2020 the platform and topsides were installed and drilling of the 4 development wells commenced During final commissioning and testing of the platform in mid-2021, issues were identified in certain offshore
Slide 16: Reinvestment in the Existing Resource Base
REINVESTMENT IN THE EXISTING RESOURCE BASE 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EUROPE Significant activity in H2, J-Area Op S15 S16 S16 S17 S15 J06 Jade South supporting future production J-Area Op Talbot Dunnottar Operated drilling activity now back AELE Op Everest LAD to pre-COVID levels GBA Op Ca
Slide 17: Decommissioning: Continued Strong Operational Performance
DECOMMISSIONING: CONTINUED STRONG OPERATIONAL PERFORMANCE Heavy lift campaign to remove the LOGGS complex (5 platforms) completed Southern North Sea programme – continued strong safety performance: five years without a significant injury Final well at MacCulloch plugged and abandoned, completing the
Slide 18: Significant Synergies to Be Realised from the Merger
SIGNIFICANT SYNERGIES TO BE REALISED FROM THE MERGER Integration is underway c Modular & scalable organisation Contracts & Integration and renegotiation of contracts, Procurement suppliers and contracting strategies Complimentary operating models Experience in integration Logistics & Capture t
Slide 19: V Net Zero CO2 Transport and Storage Project
V NET ZERO (VNZ) CO2 TRANSPORT AND STORAGE (T&S) PROJECT Exploring the potential for CCS projects to support a lower carbon economy in the UK The Humber is the UK’s most energy intense industrial area emitting 19.8 MtCO2/year VNZ CO2 T&S project developed by Harbour Aim to transport and store
Slide 20: International Portfolio
INTERNATIONAL PORTFOLIO Cash generative producing assets in South East Asia, with attractive organic growth options in Indonesia and Mexico South East Asia – cash generative production Zama, Mexico – robust economics, long life field NSBA, Indonesia 12.39% interest in Zama unit 10 kboepd net in
Slide 21: Aligning Portfolio with Harbour's Strategy
ALIGNING PORTFOLIO WITH HARBOUR’S STRATEGY Ability to pursue a fully funded growth strategy Broad set of organic growth options Norway as well as an attractive international UK M&A opportunity set Ability to high-grade opportunities drives higher returns Mexico Vietnam Steps taken to align e
Slide 22: Agenda
AGENDA 1. H1 highlights and overview 2. Operations review 3. Financial performance 4. Wrap-Up 21 Half Year Results| 23 September 2021
Slide 23: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Able to fund reinvestment, shareholder returns and retain optionality for meaningful, value-accretive transactions 1 Balance sheet strength Targeting conservative leverage profile through the cycle Potential for an investment grade credit rating 2 Ensuring a robust and
Slide 24: Income Statement
INCOME STATEMENT Increased profitability and strengthened operating margins1 during H1 Realised pricing $ million H1 2021 H1 2020 $/boe; pence/therm Revenue 1,496 1,244 H1 2020 H1 2021 64 Operating costs (500) (370) 58 Other operating expenses / income (116) 63 38 31 G&A (37) (17) EBITDAX 843 920 DD
Slide 25: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION A robust balance sheet underpinned by a well funded financial profile and prudent capital allocation Assets 30.6.21 31.12.20 Equity and liabilities 30.6.21 31.12.20 $ million $ million $ million $ million Goodwill 1,237 990 Equity 1,737 1,067 Other intangible assets 1
Slide 26: A Strong Financial Position
A STRONG FINANCIAL POSITION Annual redetermination of RBL facility with >$6bn of revenue secured via hedging out to 2025 availability set at $3.3 bn Year Average Volume Year Average Volume Significant liquidity in excess of $1 bn OIL hedged price hedged GAS hedged price hedged ($/bbl) (mmboe) (p
Slide 27: Cash Flow Statement
CASH FLOW STATEMENT Executed a significant transaction and generated free cash flow while retaining a robust balance sheet $M 3000 $1.33 bn draw down of RBL, principally to fund merger Tax paid largely related to Chrysaor’s 2020 UK 2000 activities Generated >$300 million of free cash flow after
Slide 28: 2021 Guidance
2021 GUIDANCE Production Capital expenditure excluding abex1 Actual / H1 FY kboepd $m Proforma Guidance 2021 2021 200 Reported 600 150 400 Reported 151 170-180 100 production kboepd kboepd 200 50 Proforma 180 185-195 0 0 H1 2021 H2 2021est. H1 2021 H2 2021est. production kboepd kboepd 2021 FY est. o
Slide 29: Agenda
AGENDA 1. H1 highlights and overview 2. Operations review 3. Financial performance 4. Wrap-Up 28 Half Year Results| 23 September 2021
Slide 30: 2021 Priorities
2021 PRIORITIES A full update on the Group’s strategy and capital allocation plans will be provided at a Capital Markets Day on 9 December Maintain safe and responsible operations Focus on health and safety of our people Minimise carbon footprint Deliver reported production of 170 to 180 kboep
Slide 31: Strategy
STRATEGY To continue building a global, diversified, oil & gas company Ensure safe, reliable and environmentally responsible operations Retain a large diversified portfolio of production, reserves and resources – Maximise value from cash generative UK asset base – Diversify and deliver growth th
Slide 32: Appendix: An Institutional Share Register
APPENDIX: AN INSTITUTIONAL SHARE REGISTER Largest UK listed independent oil and gas company Listed on the premium segment of the London Stock Exchange under the ticker HBR Member of FTSE All Share, FTSE 250 constituent Share register dominated by global investors, sovereign wealth funds, pen
Slide 33: ae Harbour
ae Harbour gem Energy