Full year results for the year to 31 December 2024

About this update from Harbour Energy Plc

[{"type":"text","content":"\n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n Harbour Energy plc \n Full year results for the year to 31 December 2024 \n 6 March 2025 \n   \n Harbour Energy plc (\"Harbour\" or the \"Company\" or the \"Group\") today announces its results for the year ended 31 December 2024. \n Actuals to 31 December 2024 reflect the completion of the Wintershall Dea transaction on 3 September 2024 and include approximately four months of contribution from the acquired portfolio. \n Linda Z Cook, Chief Executive Officer, commented: \n \"2024 was a transformational year with the completion of the Wintershall Dea transaction, our fourth significant transaction since 2017. As a result, we achieved a step change in the scale, resilience and longevity of our business underpinning the potential for material free cash flow generation well into the next decade. At the same time, we delivered another year of solid operational and financial performance. \n \"Looking to 2025, we have had a strong start to the year. We continue to prioritise safe and efficient operations, mature our significant 2C resource base and maintain disciplined capital allocation. We remain excited about our future and look forward to realising the potential of our company for all our stakeholders.\" \n Operational highlights \n \n \n \n \n § \n \n \n Completed transformational acquisition of Wintershall Dea portfolio; integration progressing as planned \n \n \n \n \n § \n \n \n Production of 258 kboepd (2023: 186 kboepd), a c.40 per cent increase on 2023 \n \n \n \n \n § \n \n \n Unit operating costs of $16.5/boe (2023: $16.4/boe) \n \n \n \n \n § \n \n \n Total recordable injury rate of 1.0 per million hours worked (2023: 0.7) \n \n \n \n \n § \n \n \n Successful drilling in the UK, Norway, Argentina and Indonesia; new projects online in the UK and Argentina \n \n \n \n \n § \n \n \n Total capital expenditure (including decommissioning) of $1.8 billion (2023: $1.0 billion) \n \n \n \n \n § \n \n \n 2P reserves and 2C resources more than tripled to 3.2 bnboe (2023: 880 mmboe), representing 19 years 2P reserves and 2C resource life \n \n \n \n \n § \n \n \n Appointment of Chief Operating Officer, Nigel Hearne, in February 2025 \n \n \n \n \n Financial highlights [1] \n \n \n \n \n § \n \n \n Revenue and EBITDAX of $6.2 billion (2023: $3.7 billion) and $4.0 billion (2023: $2.7 billion), up c.65 per cent and c.50 per cent respectively, versus 2023 \n \n \n \n \n § \n \n \n Profit before tax of $1.2 billion (2023: $0.6 billion) impacted by c.$0.8 billion of period specific predominantly non-cash accounting charges largely driven by adverse changes to the UK fiscal regime \n \n \n \n \n § \n \n \n Loss after tax of $93 million (2023: $45 million profit) reflecting a 108% effective tax rate (2023 restated: 93%) \n \n \n \n \n § \n \n \n Free cash flow of $0.1 billion (2023: $1.0 billion), including a $0.5 billion negative working capital movement and before one-off acquisition-related costs and shareholder distributions. \n \n \n \n \n § \n \n \n Proposed final dividend of $227.5 million (13.19 cents per ordinary share), in line with Harbour's increased annual dividend policy of $455 million ($380 million to be paid on the ordinary shares) \n \n \n \n \n § \n \n \n Net debt before unamortised fees of $4.7 billion (2023: $0.2 billion); year-end leverage (net debt before unamortised fees/pro forma EBITDAX) of 0.7x (2023: 0.1x) \n \n \n \n \n § \n \n \n Corporate and senior unsecured issue credit ratings upgraded to investment grade Baa2, BBB- and BBB- from Moody's, S&P and Fitch, respectively \n \n \n \n \n 2025 outlook \n \n \n \n \n § \n \n \n Production of 450-475 kboepd, a c.80% increase versus 2024; production of c.500 kboepd to end February 2025  \n \n \n \n \n § \n \n \n Unit operating cost of c.$14/boe, a c.15% reduction versus 2024 \n \n \n \n \n § \n \n \n Total capital expenditure (including decommissioning spend) of c.$2.4-2.6 billion \n \n \n \n \n § \n \n \n At Brent oil price of $80/bbl and European and UK natural gas prices of $13/mscf, estimated free cash flow of c.$1.0 billion \n \n \n \n \n \n \n \n Enquiries      \n \n \n \n \n \n \n \n \n \n \n Harbour Energy plc    \n \n \n +44 20 3833 2421 \n \n \n \n \n \n \n \n Elizabeth Brooks, SVP Investor Relations \n Andy Norman, SVP Communications \n \n \n \n \n \n \n \n \n \n \n Brunswick   \n \n \n +44 20 7404 5959 \n \n \n \n \n \n \n \n Patrick Handley, Will Medvei \n \n \n \n \n \n \n \n   \n Analyst and investor conference call and webcast \n Harbour will host a Capital Markets Update today, including a presentation of its 2024 Full Year Results, at 9.00am (UK time). The link to register for the webcast, and the presentation, will be available on www.harbourenergy.com . A replay will be available on Harbour's website shortly after the event. \n   \n Details of the Capital Markets Update is outlined in a separate announcement issued this morning. \n Forward looking statements \n This statement contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst Harbour believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond Harbour's control or within Harbour's control where, for example, Harbour decides on a change of plan or strategy. Accordingly, no reliance may be placed on the figures contained in such forward-looking statements. \n Auditors Report \n In accordance with the UK Listing Rule 6.4, the 2024 Auditors Report will be submitted to the Financial Conduct Authority via the National Storage Mechanism today and will be available for inspection at: http://data.fca.org.uk/#/nsm/nationalstoragemechanism \n \n Performance \n Solid operational performance materially enhanced by acquisition \n Production averaged 258 kboepd (2023: 186 kboepd) during 2024, split c.40 per cent liquids, c.45 per cent European natural gas and c.15 per cent other natural gas. \n The c.40 per cent increase in production in 2024 versus 2023 was driven by the acquisition of the Wintershall Dea assets. The acquisition completed in September resulting in our expanded and diversified global portfolio achieving rates of c.500 kboepd in the fourth quarter with material contributions from Norway, the UK and Argentina. \n Production was also supported by new projects and development wells coming on-stream in the UK, Argentina and Norway in the second half of the year. Looking to 2025, production on a full year basis is expected to increase to between 450-475 kboepd reflecting a full 12 months' contribution from the acquired Wintershall Dea assets and broadly stable production in the UK.  \n Absolute operating costs for 2024 were $1.6 billion (2023: $1.1 billion) which, on a unit of production basis, equated to $16.5/boe (2023: $16.4/boe). This reflects the addition of the lower cost Wintershall Dea portfolio offset by higher unit operating costs at our UK assets due to lower production volumes. In 2025, unit operating costs are expected to reduce to c.$14/boe, benefitting from a full year's contribution from the Wintershall Dea portfolio and continued management of our UK cost base. \n 2024 capital expenditure including decommissioning totalled $1.8 billion (2023: $1.0 billion). The increase on the prior year reflects the additional capital expenditure associated with the acquired Wintershall Dea assets, and accelerated capital investment in the UK ahead of anticipated changes to the UK fiscal regime. 2025 total capital expenditure is expected to be between $2.4-2.6 billion, reflecting 12 months of the Wintershall Dea portfolio partially offset by materially reduced capital investment in the UK. \n Safe and responsible operations \n A priority during the year was the safe transfer of the Wintershall Dea portfolio which we achieved in September. However, after consistently improving our safety record, 2024 saw Harbour's total recordable injury rate increase to 1.0 per million hours worked (2023: 0.7), in part reflecting the higher TRIR from the newly acquired assets for the last four months of 2024.  Further, we recorded our first-ever Tier 1 process safety event - in Indonesia - along with three Tier 2 events (2023: zero). All events have been rigorously investigated, resulting in actions to improve performance with a particular focus on strengthening our process safety defences in Indonesia and reducing our TRIR in Germany.  \n In 2024, our GHG intensity improved to 14 kgCO 2 e/boe, (2023: 22 kgCO 2 e/boe) on a net equity, pro forma basis, reflecting the lower emissions intensity of the acquired portfolio. We remain on track to halve our gross operated emissions by 2030. \n Maximising the value of our producing assets \n The majority of Harbour's capital programme is focused on infrastructure-led opportunities, converting reserves into production and cash flow. These opportunities are typically low risk, high return investments concentrated around our existing production hubs, predominantly in Norway, the UK, Argentina and Germany. \n In the UK, 2024 saw Harbour accelerate drilling around its operated hubs, taking advantage of tax credits which expired before year end 2024. This included a return to drilling at the Britannia satellite fields, with the Callanish F6 infill well on-stream in July while, at AELE, the North West Seymour well started up production in September. At Jocelyn South, we made a gas condensate discovery which is being brought on-stream through Harbour's Judy platform post period end in Q1 2025. In addition, in November, Harbour delivered first oil from its operated Talbot project, a three well subsea tie-back to J-Area. The project marked a material milestone for Harbour and was completed on schedule, within budget and with no recordable injuries. \n In Norway, we continued to mature our pipeline of high value, short cycle developments. This includes the Harbour-operated Maria Phase 2 project, a four well subsea tieback to existing infrastructure in the Maria field, with production start-up expected during summer 2025, and Dvalin North, a subsea tieback to Dvalin. At Dvalin North, fabrication of the subsea infrastructure is well advanced with development drilling expected to commence in 2026. Harbour has a proven exploration track record in Norway, helping to support reserve replacement. This continued in 2024 with six successes from six exploration and appraisal wells drilled, including the Storjo gas discovery and successful appraisal drilling at Adriana/Sabina, both potential tie-backs to the Skarv hub.  \n In Argentina, Harbour holds a material non-operated position and is one of the country's largest gas producers. Production at our offshore CMA-1 concession in the Tierra del Fuego province was supported by the Fenix gas project, comprising a three well unmanned platform tied into existing CMA-1 facilities, which came on-stream ahead of schedule in September. Onshore in the Neuquén province, a multi-pad drilling campaign is ongoing to maintain gas production from our Aguada Pichana Este concession in the Vaca Muerta unconventional play. Production is currently constrained by offtake and local market capacity. \n Elsewhere, in Germany, development activities across our three production hubs continued to support stable production. In Egypt, the two Raven West infill wells at West Nile Delta were progressed with production start-up from the first well achieved post period end in February 2025. In Indonesia, Harbour successfully amended its gas sales agreements with the Singapore buyers of Natuna Sea Block A gas, increasing the take-or-pay commitment under a tiered pricing structure, enabling higher production in the second half of 2024. \n As at year end 2024, Harbour's proven and probable (2P) reserves on a working interest basis stood at 1.25 bnboe, more than three times higher than that at year end 2023 (2023: 0.36 bnboe). This increase was driven by the addition of 1.0 bnboe from the Wintershall Dea transaction, offsetting the impact of production by more than tenfold.  \n Strategic investment options \n A broad set of major projects with the potential for material reserves replacement \n During 2024, Harbour's 2C resources more than tripled to 1.91 bnboe (2023: 0.52 bnboe), driven by the Wintershall Dea transaction and providing significant reserve replacement opportunities. Organic additions to our 2C resources included exploration success in Indonesia, Norway and the UK, partially offset by revisions to our UK resources, largely the result of changes to the fiscal environment. \n Harbour's 2C resources are split c.40 per cent in high value, near infrastructure opportunities, mainly in Norway, the UK and Argentina; c.30 per cent in conventional offshore growth projects in Mexico and Indonesia; with the remaining c.30 per cent in the globally competitive, unconventional Vaca Muerta shale play , onshore Argentina. \n In Mexico, through the Wintershall Dea transaction, Harbour increased its interest in the offshore Zama and Kan oil fields and obtained an interest in the offshore Polok and Najaal discoveries. At Zama, FEED on the approved unit development plan was substantially completed in 2024. The Zama partners are now in discussions with Pemex to optimise the development concepts and accelerate first oil. A positive final investment decision at Zama would result in significant 2C resource moving into 2P reserves, replacing the equivalent of over a year's worth of Group production. To the southwest of Zama, appraisal drilling was successfully completed at the Harbour operated Kan oil discovery in Block 30. Work to identify the optimum development concept will be undertaken during 2025. \n In August, a multi-well exploration and appraisal campaign across our Andaman Sea acreage in Indonesia was completed and included material gas discoveries at Layaran and Tangkulo on Andaman South (Harbour 20 per cent). In addition, Harbour secured a 60 per cent operated interest in the Central Andaman licence, which includes an extension of the Layaran discovery. Harbour, together with its partners, is now evaluating potential development options, including an accelerated development at Tangkulo. \n Argentina represents the largest single component of Harbour's 2C resources, with 770 mmboe of 2C resources. In Q4, Harbour signed a participation agreement to acquire a 15 per cent interest in Southern Energy SA which is looking to develop a 2.45 million tonnes per annum (mtpa) FLNG export project off the coast of the Rio Negro province. It is anticipated that the upstream partners in Southern Energy SA will supply the natural gas for the FLNG project, enabling Harbour's Argentina natural gas to access global LNG export markets. This marks a significant milestone towards unlocking the accelerated development of Harbour's huge natural gas resource in Argentina. Harbour also has an interest in the San Roque licence, which is in the oil window of the Vaca Muerta play, and discussions with partners for the potential development of the resource are ongoing.  \n Building a competitive CCS business \n Harbour's pipeline of potential CCS projects was strengthened in 2024 by the acquisition of the Wintershall Dea portfolio which added CO 2 storage licences in Denmark, Norway and the UK, where we already have our Viking project.  \n At Viking, FEED was substantially completed in 2024 and the Development Consent Order (DCO) for the proposed new onshore CO 2 pipeline was submitted to the Secretary of State for approval in December. Clarity on commercial terms of the project is anticipated following the conclusion of the UK Government's Critical Spending Review in 2025. Viking's gross storage resource increased to 417 million tonnes as at 31 December 2024 (2023: 300 million tonnes), following the addition of the storage resources of two new CCS licences in Viking's vicinity awarded in 2023. \n In December 2024, Harbour together with its partners announced a final investment decision for the Greensand Future project in Denmark, marking Harbour's first CCS project to reach FID. Greensand Future is a small, short cycle project with high returns, driven by the ability to reuse existing infrastructure and defer decommissioning at the Nini field. The project is targeting first injection from 2026. Harbour also has an interest in the cost-advantaged, onshore Greenstore CCS project in Denmark, which is being progressed through the appraisal work programme. \n M &A remains a core part of our strategy \n With the addition of the Wintershall Dea portfolio, we have a much wider organic investment opportunity set with the potential to support material production well into the next decade. However, M&A remains a core dimension of our strategy, and we will continue to leverage our capabilities in this area to strengthen our portfolio. \n The opportunity set for M&A remains rich including potential asset sales from large companies following consolidation, private companies continuing to look for liquidity, and small companies seeking scale, access to capital and relevance with investors.  We will however continue to be disciplined, prioritising high-quality assets which lengthen our reserve life, provide a balance of oil and gas, and increase our operational control while, at the same time, are supportive to our investment grade credit ratings. \n We will also continue to actively manage our portfolio, ensuring our capital and resources are deployed in line with our strategy. To this end, we agreed the sale of our Vietnam business, post period end, and exited an uncompetitive CCS licence in the UK.  \n Strong financial position \n The acquisition of the Wintershall Dea assets is expected to deliver a step up in the scale and sustainability of our free cash flow, underpinned by our improved reserve life and expanded resource base. For 2024, Harbour delivered free cash flow of $0.1 billion for the year, before shareholder distributions and one-off acquisition-related costs. Cash flow is impacted by a number of period specific items including a material negative working capital movement, driven by the adjustment of our working capital cycle to the increased size of our business, significant planned shutdowns in Norway in September post completion, and payment of previously deferred UK taxes on 2023 earnings.  \n The Board has declared a final dividend of $227.5 million in respect of the 2024 financial year to be paid in May 2025 equating to 13.19 cents per ordinary share, subject to shareholder approval. This is in line with the Board's commitment at the time of acquisition announcement to increase the annual dividend to $455 million and signals the Board's ongoing confidence in the scale and longevity of our free cash flow generation. \n Harbour's debt structure was transformed over 2024 with the reserves-based debt facility replaced with unsecured, lower cost and more flexible bank facilities and bonds. Harbour's corporate and senior bond credit ratings were upgraded to investment grade from all leading credit rating agencies and in October, Harbour issued €1.6 billion of Euro denominated, investment grade bonds. At year-end 2024, net debt (before unamortised fees) stood at $4.7 billion with leverage, on a pro forma basis, of 0.7x. \n Since becoming a public company in 2021, our sustained operational and financial delivery along with our disciplined approach to capital allocation enabled us to repay c.$2.9 billion of debt and return c.$1.2 billion to shareholders while retaining the flexibility to complete a transformational acquisition. \n 2025 Annual General Meeting (AGM) and Board update \n Harbour Energy's Annual General Meeting will be held on Thursday 8 May 2025. The Notice of Meeting will be published alongside the full annual report and accounts in March 2025. Andy Hopwood will be standing down from the Board at the close of the AGM and will not therefore be put forward for re-election by shareholders.  \n Harbour plans to seek authority from its shareholders at its upcoming AGM to conduct an off-market buyback of shares held by BASF, its largest shareholder. While BASF remain a significant shareholder, it is Harbour's intention to seek such authority each year from its shareholders to retain maximum flexibility. The Company is not obliged to exercise the authority or proceed with an off-market buyback once the authority has been approved. \n Outlook 1 \n Looking to 2025, Harbour will benefit from a full year's contribution from the Wintershall Dea assets resulting in another step up in production, a reduction in unit operating costs and increased free cash flow generation. In these times of continued geopolitical uncertainty and commodity price volatility, the resilience our more diverse and lower cost portfolio provides is ever more important. It is also why we aim for a balance of oil and gas and employ a disciplined and consistent approach to hedging. At Brent oil prices of $80/bbl and UK and European natural gas prices of $13/mscf, we expect to generate free cash flow of c. $1.0 billion 1 in 2025. With a $5/bbl change in Brent oil prices or $1/mscf change in European natural gas prices impacting free cash flow by c.$115 million, we still expect to generate material free cash flow at current prices. \n As we look to the future, we will continue to prioritise safe and efficient operations as we complete the integration of our new Business Units, mature our significant 2C resource base and maintain disciplined capital allocation. Our high-quality portfolio with significant optionality, financial strength and strong management team mean we are well-positioned for continued execution of our strategy and delivery of competitive shareholder returns. \n   \n   \n   \n   \n   \n   \n   \n   \n 1 2025 guidance/outlook assumes a US dollar to GBP sterling exchange rate of $1.25/£, US dollar to Euro exchange rate of $1.1/€ and a Norwegian NOK to US dollar exchange rate of NOK11/$. Free cash flow sensitivity assumes mid-point of production and capex guidance. A 1:1 conversion rate for $/mmbtu to $/mscf has been assumed. \n Financial Review \n Summary of financial results \n \n \n \n \n \n \n \n Units \n \n \n 2024 \n \n \n 2023 \n As restated 1 \n \n \n \n \n Production and post-hedging realised prices \n \n \n \n \n \n \n \n \n \n \n \n \n \n Production \n \n \n kboepd \n \n \n 258 \n \n \n 186 \n \n \n \n \n Crude oil \n \n \n $/boe \n \n \n 82 \n \n \n 78 \n \n \n \n \n European gas 2 \n \n \n $/mscf \n \n \n 11 \n \n \n 7 \n \n \n \n \n Other gas 2 \n \n \n $/mscf \n \n \n 4 \n \n \n 13 \n \n \n \n \n Income statement \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue and other income \n \n \n $ million \n \n \n               6,226 \n \n \n 3,751 \n \n \n \n \n EBITDAX 3 \n \n \n $ million \n \n \n               4,006 \n \n \n 2,675 \n \n \n \n \n Profit before taxation \n \n \n $ million \n \n \n               1,219 \n \n \n 616 \n \n \n \n \n (Loss)/profit after taxation \n \n \n $ million \n \n \n (93) \n \n \n 45 \n \n \n \n \n Basic (loss)/earnings per ordinary voting share \n \n \n cents/share \n \n \n (10) \n \n \n 6 \n \n \n \n \n Other financial key figures \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total capital expenditure 3 \n \n \n $ million \n \n \n 1,828 \n \n \n 969 \n \n \n \n \n Operating cash flow \n \n \n $ million \n \n \n 1,615 \n \n \n 2,150 \n \n \n \n \n Free cash flow 3 \n \n \n $ million \n \n \n (118) \n \n \n 1,048 \n \n \n \n \n Shareholder returns paid 3 \n \n \n $ million \n \n \n 199 \n \n \n 439 \n \n \n \n \n Net debt 3   \n \n \n $ million \n \n \n               4,424 \n \n \n 207 \n \n \n \n \n Leverage ratio 3 \n \n \n times \n \n \n                    1.1 \n \n \n 0.1 \n \n \n \n \n 1 2023 results throughout this financial review have been restated with respect to the Vietnam asset held for sale classification given the previous sales process did not conclude. \n 2 2024 reflects the impact of the Wintershall Dea portfolio. Europe includes UK, Norway and Germany with 2023 comparative restated to $/mscf.  For Other gas, the 2023 comparative relates solely to the Indonesia business. \n 3 See Glossary for the definition of non-IFRS measures. Reconciliations between IFRS and non-IFRS measures are provided within this financial review. \n \n \n   \n Income Statement \n \n \n \n \n \n \n \n 2024 \n  $ million \n \n \n 2023 \n  $ million \n As restated \n \n \n \n \n Revenue and other income \n \n \n               6,226 \n \n \n 3,751 \n \n \n \n \n Cost of operations \n \n \n (3,613) \n \n \n (2,376) \n \n \n \n \n EBITDAX 1 \n \n \n               4,006 \n \n \n 2,675 \n \n \n \n \n Operating profit \n \n \n               1,648 \n \n \n 932 \n \n \n \n \n Profit before tax \n \n \n               1,219 \n \n \n 616 \n \n \n \n \n Taxation \n \n \n (1,312) \n \n \n (571) \n \n \n \n \n (Loss)/profit after tax \n \n \n (93) \n \n \n 45 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cents/share \n \n \n Cents/share \n As restated \n \n \n \n \n Basic (loss)/earnings per ordinary voting share \n \n \n (10) \n \n \n 6 \n \n \n \n \n 1 Non-IFRS measure - see Glossary for the definition. \n Revenue and other income \n Total revenue and other income increased to $6,226 million (2023: $3,751 million). This was driven by higher production, primarily due to the Wintershall Dea transaction with the newly acquired portfolio contributing $2,021 million in the four months post completion, and increased commodity prices, especially European natural gas. \n \n \n \n \n \n \n \n 2024 \n  $ million \n \n \n 2023 \n $ million \n \n \n \n \n Revenue and other income \n \n \n               6,226 \n \n \n 3,751 \n \n \n \n \n Crude oil \n \n \n               2,878 \n \n \n 2,086 \n \n \n \n \n Gas \n \n \n               2,936 \n \n \n 1,415 \n \n \n \n \n Condensate \n \n \n                  283 \n \n \n 179 \n \n \n \n \n Tariff income and other revenue \n \n \n                     61 \n \n \n 35 \n \n \n \n \n Other income \n \n \n                     68 \n \n \n 36 \n \n \n \n \n Revenue earned from hydrocarbon production activities increased to $6,097 million (2023: $3,680 million) after realised hedging losses of $18 million (2023: $911 million). This increase was mainly driven by higher production due to the acquired portfolio and higher post-hedging realised European natural gas prices.   Of Harbour's total annual production of 258 kboepd and revenue of $6,226 million, 98 kboepd and $2,021 million revenue was delivered by the acquired portfolio in the four months post completion.  \n Crude oil sales increased to $2,878 million (2023: $2,086 million) after realised hedging gains of $32 million (2023: losses of $93 million). This was driven by higher production volumes from the acquired portfolio as well as a higher realised post-hedging oil price of $82/bbl (2023: $78/bbl). Of Harbour's total annual crude oil production of 90 kboepd and total $2,878 million post-hedging crude oil revenue, 27 kboepd and $590 million was delivered by the acquired portfolio in the four months post completion. \n Gas revenue was $2,936 million (2023: $1,415 million), split between European gas revenue of $2,644 million (2023: $1,284 million) including realised hedging losses of $50 million (2023: $818 million) and other gas revenue of $292 million (2023: $131 million). The increase in both categories is primarily due to the acquired portfolio. Of Harbour's total annual gas production of 149 kboepd, 67 kboepd was delivered by the acquired portfolio in the four months post completion with associated European and Other post-hedging gas revenue of $1,121 million and $174 million respectively. The realised post-hedging price for our European and other gas was $11/mscf (2023: $7/mscf) and $4/mscf (2023: $13/mscf), respectively. The fall in the realised other gas price reflects the lower price environments of the acquired portfolio. \n Condensate revenue was $283 million (2023: $179 million) and tariff income $61 million (2023: $35 million). Other income amounted to $68 million (2023: $36 million) which includes partner recovery on lease obligations and government subsidies in Argentina. \n Cost of operations \n Cost of operations increased to $3,613 million (2023: $2,376 million, as restated) driven primarily by costs associated with the acquired assets and a negative movement in hydrocarbon inventories and over/underlift. Cost of operations includes operating costs of $1,612 million (2023: $1,171 million) and depreciation, depletion and amortisation expense of $1,704 million (2023: $1,414 million, as restated) as discussed below along with over/underlift movements and other items for an expense of $297 million (2023: $209 million, credit). \n \n \n \n \n \n \n \n 2024 \n  $ million \n \n \n 2023 \n  $ million \n As restated \n \n \n \n \n Operating costs \n \n \n \n \n \n \n \n \n \n \n Field operating costs \n \n \n               1,612 \n \n \n 1,171 \n \n \n \n \n Non-cash depreciation on non-oil and gas assets \n \n \n (25) \n \n \n (26) \n \n \n \n \n Tariff income \n \n \n (32) \n \n \n (30) \n \n \n \n \n Total operating costs \n \n \n               1,555 \n \n \n 1,115 \n \n \n \n \n Operating costs per barrel ($ per barrel) 1 \n \n \n                 16.5 \n \n \n 16.4 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Movement in over/underlift balances and hydrocarbon inventories \n \n \n                  201 \n \n \n (225) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Depreciation, depletion and amortisation (DD&A) \nbefore impairment charges \n \n \n \n \n \n \n \n \n \n \n Depreciation of oil and gas properties \n \n \n               1,704 \n \n \n 1,414 \n \n \n \n \n Depreciation of non-oil and gas properties \n \n \n                     22 \n \n \n 12 \n \n \n \n \n Amortisation of intangible assets \n \n \n                     19 \n \n \n 23 \n \n \n \n \n Total DD&A \n \n \n               1,745 \n \n \n 1,449 \n \n \n \n \n DD&A before impairment charges ($ per barrel) 1 \n \n \n                 18.5 \n \n \n 21.3 \n \n \n \n \n 1 Non-IFRS measure - see Glossary for the definition. \n   \n Total operating costs increased to $1,555 million (2023: $1,115 million) driven by the four-month contribution of the acquired portfolio. However, they were materially unchanged on a unit of production basis at $16.5 / boe (2023: $16.4 / boe ). \n Depreciation, depletion and amortisation unit expense, which reflects the capitalised costs of producing assets divided by produced volumes, decreased to $18.5 / boe (2023: $21.3 / boe, as restated). \n General and administrative expenses \n General and administrative expenses amounted to $352 million (2023: $149 million). The increase was driven by the enlarged group, including expansion of our corporate centre, and additional and one-off M&A transaction costs of $119 million (2023: $33 million) associated with the Wintershall Dea acquisition. \n \n \n   \n EBITDAX 1 \n EBITDAX 1 was $4,006 million (2023: $2,675 million, as restated), with the increase driven by the four-month contribution of the acquired assets. \n \n \n \n \n \n \n \n 2024 \n  $ million \n \n \n 2023 \n  $ million \n As restated \n \n \n \n \n Operating profit \n \n \n               1,648 \n \n \n 932 \n \n \n \n \n Depreciation, depletion and amortisation \n \n \n               1,745 \n \n \n 1,449 \n \n \n \n \n Impairment of property, plant and equipment \n \n \n                  352 \n \n \n 176 \n \n \n \n \n Impairment of right-of-use asset \n \n \n 20 \n \n \n - \n \n \n \n \n Impairment of goodwill \n \n \n                      -   \n \n \n 25 \n \n \n \n \n Exploration and evaluation expenditure, and new ventures \n \n \n                     68 \n \n \n 36 \n \n \n \n \n Exploration costs written-off \n \n \n                  173 \n \n \n 57 \n \n \n \n \n EBITDAX 1 \n \n \n               4,006 \n \n \n 2,675 \n \n \n \n \n 1 Non-IFRS measure - see Glossary for the definition. \n   \n The Group has recognised a net pre-tax impairment charge on property, plant and equipment of $352 million (2023: $176 million, as restated). Of this, $174 million was in respect of revisions to decommissioning estimates on mainly non-producing assets with no remaining book value. The remainder largely relates to impairments on three fields in the UK due to impacts from further changes to the UK Energy Profits Levy (EPL) and changes in life of field outlook. \n During the year, the Group expensed $241 million (2023: $93 million) of exploration and appraisal activities. This covers exploration write-off expense of $173 million (2023: $57 million) including write-off of costs associated with projects in the UK ($79 million) and licence relinquishments in Norway ($64 million), and $40 million (2023: $29 million) costs primarily associated with carbon capture and storage activities. \n Net financing costs \n Finance income amounted to $173 million (2023: $104 million). The increase compared to 2023 is primarily due to unrealised foreign exchange gains of $118 million during the year which predominantly arose on the revaluation of the Group's tax liabilities due to the strengthening of the US dollar in the year. \n Finance expenses amounted to $602 million (2023: $420 million). This included: \n \n \n \n \n § \n \n \n interest expense incurred of $78 million (2023: $42 million) related to debt facilities and bonds; \n \n \n \n \n § \n \n \n bank and financing fees of $139 million (2023: $100 million); \n \n \n \n \n § \n \n \n unwinding of the discount on decommissioning provisions of $221 million (2023: $156 million) which \n increased due to the acquired assets and increased estimates in the UK; \n \n \n \n \n § \n \n \n $53 million (2023: $51 million) of lease interest; \n \n \n \n \n § \n \n \n $43 million related to changes in the fair value of foreign exchange derivatives (2023: $nil); and \n \n \n \n \n § \n \n \n realised losses on foreign exchange forward contracts $71 million (2023: $9 million, gain). \n \n \n \n \n Earnings and taxation \n Loss after tax amounted to $93 million (2023: $45 million profit, as restated). This resulted in a loss per ordinary voting share of 10 cents (2023: 6 cents, earnings, as restated) after taking into account the weighted average number of ordinary voting shares in issue of 990 million (2023: 804 million) following the issue of shares to BASF and LetterOne as part of the acquisition. After taking into consideration $15 million (2023: $nil) attributable to subordinated notes investors, loss after tax attributable to equity owners of the company amounted to $108 million (2023: $45 million gain attributable to equity owners of the company). \n Harbour's tax expense increased to $1,312 million in 2024 (2023: $571 million, as restated), primarily driven by higher pre-tax profits resulting from the additional earnings contributed by the acquisition and specific UK adjustments due to the EPL. The tax expense comprises a current tax expense of $1,415 million (2023: $677 million) and a deferred tax credit of $103 million (2023: $106 million, credit). \n The effective tax rate of 108 per cent (2023: 93 per cent, as restated) is materially higher than the statutory tax rate of 78 per cent (2023: 75 per cent). This is primarily due to several UK-specific exceptional items. Key contributors include the increase in UK decommissioning obligations in the period (15 per cent), the impairment of tangible and intangible assets in the UK (4 per cent) and the increase in the EPL rate from 35 per cent to 38 per cent (6 per cent). \n Shareholder distributions \n A final dividend with respect to 2023 of 13.00 cents per ordinary share was proposed on 7 March 2024 and approved by shareholders at the AGM on 9 May 2024. The dividend was paid on 22 May 2024 to all shareholders on the register as at 12 April 2024, totaling $100 million. An interim dividend was announced on 8 August 2024 at 13 cents per share and was paid on 25 September 2024 at a value of $99 million [2] . \n The Board is proposing a final dividend with respect to 2024 of 13.19 cents per voting ordinary share to be paid in pound sterling at the spot rate prevailing on the record date. This dividend is subject to shareholder approval at the AGM, to be held on 8 May 2025. If approved, the dividend will be paid on 21 May 2025 to shareholders as of 11 April 2025. The ex-dividend date is 10 April 2025. A dividend reinvestment plan (DRIP) is available to shareholders who would prefer to invest their dividends in the shares of the company. The last date to elect for the DRIP in respect of this dividend is 29 April 2025. \n A DRIP is provided by Equiniti Financial Services Limited. The DRIP enables the Company's shareholders to elect to have their cash dividend payments used to purchase the Company's shares. More information can be found at   www.shareview.co.uk/info/drip . \n \n \n   \n Statement of Financial Position \n \n \n \n \n \n \n \n 2024 \n  $ million \n \n \n 2023 \n  $ million \n As restated \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n \n \n Goodwill \n \n \n 5,147 \n \n \n 1,302 \n \n \n \n \n Non-current assets, excluding goodwill and deferred taxes \n \n \n            21,133 \n \n \n 7,061 \n \n \n \n \n Deferred tax assets \n \n \n                  130 \n \n \n 7 \n \n \n \n \n Current assets \n \n \n              3,634 \n \n \n 1,546 \n \n \n \n \n Assets held for sale \n \n \n                  277 \n \n \n - \n \n \n \n \n Total assets \n \n \n            30,321 \n \n \n 9,916 \n \n \n \n \n Liabilities and Equity \n \n \n \n \n \n \n \n \n \n \n Borrowings net of transaction fees \n \n \n              5,229 \n \n \n 509 \n \n \n \n \n Provisions \n \n \n              7,521 \n \n \n 4,135 \n \n \n \n \n Deferred tax liabilities \n \n \n              6,221 \n \n \n 1,297 \n \n \n \n \n Lease creditor \n \n \n                  792 \n \n \n 768 \n \n \n \n \n Derivative liabilities \n \n \n                  826 \n \n \n 284 \n \n \n \n \n Other liabilities \n \n \n              3,248 \n \n \n 1,370 \n \n \n \n \n Liabilities directly associated with assets held for sale \n \n \n                  233 \n \n \n - \n \n \n \n \n Total liabilities \n \n \n            24,070 \n \n \n 8,363 \n \n \n \n \n Equity \n \n \n              6,251 \n \n \n 1,553 \n \n \n \n \n Total liabilities and equity \n \n \n            30,321 \n \n \n 9,916 \n \n \n \n \n Net debt \n \n \n             4,424 \n \n \n 207 \n \n \n \n \n Assets \n The increase in total assets of $20,405 million to $30,321 million (2023: $9,916 million, as restated) is mainly as a result of the acquisition, primarily property, plant and equipment of $10,011 million, exploration, evaluation and other intangible assets of $4,409 million and goodwill arising from purchase price allocation exercise of $3,845 million. Total assets include assets held for sale in respect of the Vietnam disposal of $277 million. \n The goodwill of $3,845 million arises principally from the requirement to recognise undiscounted deferred tax liabilities for the difference between the fair value and the tax base of the acquired assets and liabilities assumed in the business combination. This goodwill will ultimately be charged to the income statement over time as an impairment charge, primarily as the deferred tax balances unwind. \n Liabilities \n The increase in total liabilities of $15,707 million to $24,070 million (2023: $8,363 million, as restated) is primarily driven by the recognition of the liabilities assumed as a result of the acquisition. Liabilities assumed included deferred tax liabilities of $5,500 million, borrowings net of transaction fees of $3,079 million, provisions of $2,940 million, trade and other payables of $1,159 million and current tax liabilities of $1,128 million. Additionally, the Group increased its borrowings by $1,914 million being $250 million drawn under the $3 billion revolving credit facility (RCF) and new issue of Euro-denominated bonds of $1,664 million (nominal €1,600 million). Total liabilities included liabilities directly associated with assets held for sale in respect of the Vietnam disposal of $233 million. \n The net deferred tax position on the statement of financial position is a liability of $6,091 million (2023: $1,290 million, as restated). This is primarily made up of a deferred tax liability in respect of the future profits which will flow from our property, plant and equipment of $9,600 million offset by a deferred tax asset in respect of future tax relief on decommissioning spend of $2,791 million, fair value losses on derivatives of $336 million and tax losses of $288 million (before adjustment for assets held for sale) . \n \n Equity and reserves \n Total equity increased by $4,698 million to $6,251 million (2023: $1,553 million, as restated) mainly due to the recognition of merger reserve of $3,457 million associated with the 921 million shares issued to BASF and LetterOne as part of the acquisition as well as the recognition of subordinated notes that were assumed as part of the acquisition of $1,548 million. Movements in equity also included unfavourable post-tax fair value movements on cash flow hedges of $166 million (2023: favourable of $792 million) and gains on currency translation of $130 million (2023: $103 million) all recognised in other comprehensive income. Equity was reduced by dividend payments of $199 million (2023: $190 million) in addition to the loss for the year. \n Net debt \n As at 31 December 2024, net debt of $4,424 million (2023: $207 million, as restated). This consisted of borrowings amounting to $5,512 million (2023: $500 million) net of unamortised fees of $283 million (2023: $7 million) less cash balances of $805 million (2023: $286 million, as restated). During the year the RBL facility was replaced by the RCF and, as at 31 December 2024, $250 million was outstanding. At the end of 2023 the drawdown in the RBL was $nil and there were $61 million of unamortised fees classified in debtors which were expensed in 2024. As part of the acquisition, $3,079 million worth of borrowings were assumed, and a $1,500 million bridge facility was used to complete the acquisition. This was subsequently refinanced into two Euro-denominated bonds amounting to $1,664 million (€900 million and €700 million, respectively). In addition, Harbour had surety bonds of $675 million (£540 million) at year end which provide cover for decommissioning securities. \n Available liquidity, comprising undrawn portion of the RCF facility of $1.9 billion ($250 million debt and $0.9 billion letters of credit for decommissioning have been drawn) plus cash balances of $0.8 billion (2023: $0.3 billion), was $2.7 billion (2023: $1.6 billion) at the end of the year. \n As at 31 December 2024, the leverage ratio 1 was 1.1x (2023: 0.1x) which has increased primarily as a result of the significant increase in net debt due to the acquisition, as well as only four months of EBITDAX contribution from the acquired portfolio. The balance sheet is in a strong position supported by the RCF facility and investment grade credit ratings. \n \n \n \n \n \n \n \n 2024 \n  $ million \n \n \n 2023 \n  $ million \n As restated \n \n \n \n \n Leverage ratio \n \n \n \n \n \n \n \n \n \n \n Net debt 1 \n \n \n              4,424 \n \n \n 207 \n \n \n \n \n EBITDAX 1 \n \n \n              4,006 \n \n \n 2,675 \n \n \n \n \n Leverage ratio 1 \n \n \n 1.1x \n \n \n 0.1x \n \n \n \n \n 1 Non-IFRS measure - see Glossary for the definition. \n \n \n   \n Derivative financial instruments \n We carry out hedging activity to manage commodity price risk. We have entered into both a series of fixed-price sales agreements and a financial hedging programme for both oil and gas, consisting of swap and option instruments. Hedges realised to date are in respect of both crude oil and natural gas. \n The current hedging programme is shown below: \n \n \n \n \n Hedge position \n \n \n 2025 \n \n \n 2026 \n \n \n 2027 \n \n \n \n \n Oil \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Total oil volume hedged (thousand bbls) \n \n \n 16,162 \n \n \n 12,881 \n \n \n - \n \n \n \n \n - of which swaps \n \n \n 15,598 \n \n \n 12,881 \n \n \n - \n \n \n \n \n - of which zero cost collars \n \n \n 564 \n \n \n - \n \n \n - \n \n \n \n \n Weighted average fixed price ($/bbl) \n \n \n 76.47 \n \n \n 72.88 \n \n \n - \n \n \n \n \n Weighted average collar floor and cap ($/bbl) \n \n \n 60.00 - 86.78 \n \n \n - \n \n \n - \n \n \n \n \n Natural gas \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Gas volume hedged (thousand boe) \n \n \n 33,509 \n \n \n 19,924 \n \n \n 2,056 \n \n \n \n \n - of which swaps/fixed price forward sales \n \n \n 26,912 \n \n \n 16,817 \n \n \n 2,056 \n \n \n \n \n - of which zero cost collars \n \n \n 6,597 \n \n \n 3,106 \n \n \n - \n \n \n \n \n Weighted average fixed price ($/mscf) \n \n \n 12.91 \n \n \n 10.79 \n \n \n 11.29 \n \n \n \n \n Weighted average collar floor and cap ($/mscf) \n \n \n 11.46 - 22.50 \n \n \n 9.04 - 16.71 \n \n \n -  \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n As at 31 December 2024, our financial hedging programme on commodity derivative instruments showed a pre-tax negative mark-to-market fair value of $476 million (2023: $18 million). Most of the commodity derivatives were designated as cash flow hedges, therefore, changes in fair value were reported in other comprehensive income. \n For foreign exchange derivative instruments, the pre-tax negative mark-to-market fair value was $198 million (2023: $nil).  Of this value, $173 million related to the cross-currency interest rate swaps designated as cash flow hedges relating to the euro bonds where €2.4 billion was hedged at a forward rate of between 1.1015 and 1.1209. The remaining $25 million related to FX forward contracts designated as fair value through income statement. \n \n \n   \n Acquisition of Wintershall Dea assets \n On 3 September 2024, the Group closed the transaction to acquire substantially all of Wintershall Dea's upstream assets from BASF and LetterOne, including those in Norway, Germany, Denmark, Argentina, Mexico, Egypt, Libya and Algeria as well as Wintershall Dea's CCS licences in Europe. Under the purchase price allocation that was performed, the fair values of identifiable assets and liabilities of Wintershall Dea, and resulting goodwill, are as follows: \n \n \n \n \n \n \n \n Fair value recognised on acquisition \n  $ million \n \n \n \n \n Assets \n \n \n \n \n \n \n \n Other intangible assets \n \n \n 4,409 \n \n \n \n \n Property, plant and equipment \n \n \n            10,011 \n \n \n \n \n Right-of-use assets \n \n \n 106 \n \n \n \n \n Deferred tax assets \n \n \n                  147 \n \n \n \n \n Other assets, excluding cash and cash equivalents \n \n \n           1,814 \n \n \n \n \n Cash and cash equivalents \n \n \n                  748 \n \n \n \n \n Total assets \n \n \n            17,235 \n \n \n \n \n Liabilities \n \n \n \n \n \n \n \n Borrowings \n \n \n              3,079 \n \n \n \n \n Provisions \n \n \n              2,940 \n \n \n \n \n Deferred tax liabilities \n \n \n              5,500 \n \n \n \n \n Lease creditor \n \n \n                  118 \n \n \n \n \n Derivative liabilities \n \n \n                  317 \n \n \n \n \n Other liabilities \n \n \n              2,287 \n \n \n \n \n Total liabilities \n \n \n            14,241 \n \n \n \n \n Fair value of net identifiable net assets acquired \n \n \n              2,994 \n \n \n \n \n Subordinated notes measured at fair value \n \n \n (1,548) \n \n \n \n \n Goodwill arising on acquisition \n \n \n 3,845 \n \n \n \n \n Purchase consideration transferred \n \n \n              5,291 \n \n \n \n \n   \n The goodwill of $3,845 million arises principally from the requirement to recognise undiscounted deferred taxes liabilities for the difference between the fair value and the tax base of the acquired assets and liabilities assumed in the business combination. This goodwill will ultimately be charged to the income statement over time as an impairment charge, primarily as the deferred tax balances unwind. \n From the date of acquisition, the acquired assets contributed $2,021 million of revenue and $867 million to profit before tax from continuing operations of the Group. If the combination had taken place at the beginning of the year, revenue from continuing operations would have been $10,516 million and profit before tax from continuing operations for the Group would have been $3,017 million. \n \n \n   \n Statement of cash flows 1 \n \n \n \n \n \n \n \n    2024 \n  $ million \n \n \n 2023 \n  $ million \n As restated \n \n \n \n \n Cash flow from operating activities before tax payments \n \n \n 3,114 \n \n \n 2,588 \n \n \n \n \n Tax payments \n \n \n (1,499) \n \n \n (438) \n \n \n \n \n Cash flow from operating activities after tax payments \n \n \n 1,615 \n \n \n 2,150 \n \n \n \n \n Cash flow from investing activities - capital investment \n \n \n (1,322) \n \n \n (718) \n \n \n \n \n Cash flow from investing activities - other 2 \n \n \n 89 \n \n \n 25 \n \n \n \n \n Operating cash flow after investing activities \n \n \n 382 \n \n \n 1,457 \n \n \n \n \n Cash flow from financing activities 3 \n \n \n (500) \n \n \n (409) \n \n \n \n \n Free cash flow 4 \n \n \n (118) \n \n \n 1,048 \n \n \n \n \n Cash and cash equivalents \n \n \n 805 \n \n \n 286 \n \n \n \n \n 1 Table excludes financing activities related to debt principal movements. \n 2 Excludes net expenditure on business combinations of ($1,044 million, note 14 of the financial statements). \n 3 Interest and lease interest and capital payments only, excludes shareholder distributions. \n 4 Non-IFRS measure - see Glossary for the definition. \n   \n Net operating cashflow before tax was $3,114 million (2023: $2,588 million, as restated) reflecting the enlarged group. The timing and magnitude of tax payments impacted net cash from operating activities after tax which amounted to $1,615 million (2023: $2,150 million, as restated). Tax payments during the year were $1,499 million compared to $438 million in 2023 due to the enlarged portfolio and balancing payments for prior year UK EPL. UK EPL payments amounted to $732 million (2023: $402 million).  \n Cash flow working capital movements were negative $494 million (2023: positive $205 million) as the increase in production within the enlarged business coupled with overdue receivables in Egypt and Mexico means we carry a materially higher net working capital position on our balance sheet at year end. \n Capital investment was $1,322 million (2023: $718 million) which included property, plant and equipment additions of $884 million (2023: $496 million), exploration and evaluation additions of $359 million (2023: $202 million) and other intangible additions of $79 million (2023: $20 million). Cash outflow from financing activities totalled $500 million (2023: $409 million) split between interest payments of $181 million (2023: $150 million) and lease payments of $319 million (2023: $259 million). \n Free cash flow was $118 million outflow after acquisition related costs of $235 million. Before these acquisition related costs free cash flow was $117 million inflow. \n Shareholder distributions consist of dividends paid of $199 million (2023: $190 million). In 2023, shareholder distributions also included $249 million related to the repurchase of Harbour's own shares. \n Cash and cash equivalent balances were $805 million (2023: $286 million, as restated) at the end of the year. \n \n \n   \n Capital investment is defined as additions to property, plant and equipment, fixtures and fittings and intangible exploration and evaluation assets, excluding changes to decommissioning assets. \n \n \n \n \n \n \n \n 2024 \n  $million \n \n \n 2023 \n  $million \n As restated \n \n \n \n \n Additions to oil and gas assets \n \n \n (1,037) \n \n \n (482) \n \n \n \n \n Additions to fixtures and fittings, office equipment & IT software \n \n \n (73) \n \n \n (29) \n \n \n \n \n Additions to exploration and evaluation assets \n \n \n (398) \n \n \n (210) \n \n \n \n \n Additions to other intangible assets \n \n \n (36) \n \n \n - \n \n \n \n \n Total capital investment 1 \n \n \n (1,544) \n \n \n (721) \n \n \n \n \n Movements in working capital \n \n \n 140 \n \n \n (22) \n \n \n \n \n Capitalised interest \n \n \n 18 \n \n \n 7 \n \n \n \n \n Capitalised lease payments \n \n \n 64 \n \n \n 18 \n \n \n \n \n Cash capital investment per the cash flow statement \n \n \n (1,322) \n \n \n (718) \n \n \n \n \n 1 Non-IFRS measure - see Glossary for the definition. \n During the period, the Group incurred total capital expenditure of $1,828 million (2023: $989 million), split by capital investment $1,544 million (2023: $721 million) and decommissioning spend $284 million (2023: $268 million) respectively. \n The capital investment for operated assets mainly consisted of; in the UK, project activity at Talbot (J-Area) and development drilling at J-Area, Callanish F6 (GBA), Greater Britannia appraisal at Leverett and discoveries at Gilderoy and Jocelyn South and North West Seymour (AELE); in Norway, multiple tieback projects at Maria, Dvalin North, Irpa, Alva Nord and Idun North plus Solveig; in Germany, continued development of the Mittelplate field; and in Mexico, the Kan-2 appraisal well. \n For partner-operated assets, capital investment consisted primarily of; in the UK, drilling at Buzzard, Clair and Schiehallion; in Norway, drilling continued at Skarv and Njord; in Argentina, the offshore Fenix field development was completed; and in Egypt, drilling continued on the Raven West field infill wells. In Indonesia exploration and appraisal wells were drilled at Layaran and Tangkulo in South Andaman. \n Refer to the Operational Review for more detail. \n Principal risks \n The Directors have identified several changes to the principal risks facing the company over the period, primarily as a result of how the Wintershall Dea transaction has diversified the portfolio and strengthened the financial position of the business. Notably, the principal risk recognised in the 2023 Annual Report as 'Access to capital' has been broadened to 'Financial Discipline' to encompass broader aspects of the financial management and control, while the unmitigated risk level of several principal risks has increased. \n Post balance sheet events \n On 23 January 2025 Harbour announced it had signed a Sale and Purchase Agreement to sell its Vietnam business, which includes the 53.125% equity interest in the Chim Sáo and Dua production fields, to EnQuest for $84 million. The effective date is 1 January 2024 with completion targeted during 2025. This agreement resulted in the Vietnam business unit being classed as asset held for sale as at 31 December 2024. \n On 3 March 2025, the Finance Act 2025 was substantively enacted following its third reading in the UK Parliament. While the substantive enactment has no implications for the current accounting period, it confirms that the extension of the Energy Profits Levy to 31 March 2030 will be reflected in the Group's results for the interim period to 30 June 2025.  If the Finance Act 2025 had been substantively enacted at the balance sheet date, the deferred tax liability at the end of the period would have increased by $306 million (further details are provided in note 8 of the financial statements). \n \n Going concern \n The Directors considered the going concern assessment period to be up to 31 December 2026. The Group monitors and manages its capital position and its liquidity risk regularly to ensure that it has access to sufficient funds to meet forecast cash requirements. Cash forecasts for management are regularly produced and sensitivities considered based on, but not limited to, the Group's latest life of field production and expenditure forecasts, management's best estimate of future commodity prices based on recent forward curves, adjusted for the Group's hedging programme and the Group's borrowing facilities. \n The Group's ongoing capital requirements are financed by its $3.0 billion revolving credit facility (RCF), bonds and subordinated notes $1.6 billion, and surety bonds of $675 million (£540 million) which provide cover for decommissioning securities. The RCF is subject to financial covenants that require the ratio of consolidated total net debt, including letters of credit, to last twelve months (LTM) EBITDAX to be less than 3.5x and LTM EBITDA divided by interest expense to exceed 3.5x. Under the Group's base case, the RCF is forecast to have an undrawn balance of $3.0 billion through 2025 and 2026. When combined with drawn letters of credit and unrestricted cash the headroom is forecasted to be $2.5 billion in 2026 which provides a robust liquidity position. \n The base case indicates that the Group is able to operate as a going concern with sufficient headroom and remain in compliance with its loan covenants throughout the assessment period. \n The Group's going concern assessment is based on management's best estimate of forward commodity price curves and other economic assumptions, production and expenditure in line with approved asset base case, plus the ongoing capital requirements of the Group that will be financed by free cash flow, the existing RCF and bond financing arrangements.  \n In line with the principal risks that have been identified to impact the financial capability of the Group to operate as going concern, a single downside sensitivity scenario has been prepared reflecting a reduction in: \n \n \n \n \n § \n \n \n Brent crude, UK natural gas and Dutch TTF gas prices of 20 per cent, and \n \n \n \n \n § \n \n \n the Group's unhedged production of 10 per cent \n \n \n \n \n throughout the entire assessment period. Management considers this represents a severe but plausible downside scenario appropriate for assessing going concern and viability. \n In this downside scenario when applied individually and in aggregate to the base case forecast, the Group is forecast to have sufficient liquidity headroom throughout the assessment period and to remain in compliance with its financial covenants. \n Reverse stress tests have been prepared reflecting reductions in each of commodity price and production parameters, prior to any mitigation strategies, to determine at what levels each would need to reach such that either the lending covenants are breached or liquidity headroom runs out. The results of these reverse stress tests demonstrated the likelihood that a sustained significant fall in commodity prices or a significant fall in production over the assessment period that would be required to cause a risk of funds shortfall or a covenant breach is remote. \n Taking the above analysis into account and considering the findings of the work performed to support the statement on the long-term viability of the company and the Group, the Board was satisfied that, for the going concern assessment period, the Group is able to maintain adequate liquidity and comply with its lending covenants up to 31 December 2026 and has therefore adopted the going concern basis for preparing the financial statements. \n By order of the Board, \n Alexander Krane \n Chief Financial Officer \n   \n 5 March 2024 \n Financial Statements \n Consolidated income statement \n For the year ended 31 December 2024 \n \n \n \n \n \n \n \n Note \n \n \n 2024 \n $ million \n \n \n 2023 \n As restated \n $ million \n \n \n \n \n Revenue \n \n \n 4 \n \n \n 6,158 \n \n \n 3,715 \n \n \n \n \n Other income \n \n \n 4 \n \n \n 68 \n \n \n 36 \n \n \n \n \n Revenue and other income \n \n \n \n \n \n 6,226 \n \n \n 3,751 \n \n \n \n \n Cost of operations \n \n \n 5 \n \n \n (3,613) \n \n \n (2,376) \n \n \n \n \n Impairment of property, plant and equipment \n \n \n 5, 12 \n \n \n (352) \n \n \n (176) \n \n \n \n \n Impairment of right-of-use assets \n \n \n 13 \n \n \n (20) \n \n \n - \n \n \n \n \n Impairment of goodwill \n \n \n 5, 10 \n \n \n - \n \n \n (25) \n \n \n \n \n Exploration and evaluation expenses and new ventures \n \n \n 5 \n \n \n (68) \n \n \n (36) \n \n \n \n \n Exploration costs written-off \n \n \n 5 \n \n \n (173) \n \n \n (57) \n \n \n \n \n General and administrative expenses \n \n \n 5 \n \n \n (352) \n \n \n (149) \n \n \n \n \n Operating profit \n \n \n \n \n \n 1,648 \n \n \n 932 \n \n \n \n \n Finance income \n \n \n 7 \n \n \n 173 \n \n \n 104 \n \n \n \n \n Finance expenses \n \n \n 7 \n \n \n (602) \n \n \n (420) \n \n \n \n \n Profit before taxation \n \n \n \n \n \n 1,219 \n \n \n 616 \n \n \n \n \n Income tax expense \n \n \n 8 \n \n \n (1,312) \n \n \n (571) \n \n \n \n \n (Loss)/profit for the year \n \n \n \n \n \n (93) \n \n \n 45 \n \n \n \n \n (Loss)/profit for the year attributable to: \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity owners of the company \n \n \n \n \n \n (108) \n \n \n 45 \n \n \n \n \n Subordinated notes investors \n \n \n \n \n \n 15 \n \n \n - \n \n \n \n \n \n \n \n \n \n \n (93) \n \n \n 45 \n \n \n \n \n   \n \n \n \n \n (Loss)/earnings per share \n \n \n Note \n \n \n $ cents \n \n \n $ cents \n \n \n \n \n Basic \n \n \n \n \n \n \n \n \n \n \n \n \n \n Ordinary shares voting \n \n \n 9 \n \n \n (10) \n \n \n 6 \n \n \n \n \n Ordinary shares non-voting \n \n \n 9 \n \n \n (11) \n \n \n - \n \n \n \n \n Diluted \n \n \n \n \n \n \n \n \n \n \n \n \n \n Ordinary shares voting \n \n \n 9 \n \n \n (10) \n \n \n 6 \n \n \n \n \n Ordinary shares non-voting \n \n \n 9 \n \n \n (11) \n \n \n - \n \n \n \n \n \n \n   \n Consolidated statement of comprehensive income \n For the year ended 31 December 2024 \n \n \n \n \n \n \n \n 2024 \n $ million \n \n \n 2023 \n As restated \n $ million \n \n \n \n \n (Loss)/profit for the year \n \n \n (93) \n \n \n 45 \n \n \n \n \n Other comprehensive income/(loss) \n \n \n \n \n \n \n \n \n \n \n Items that will not be subsequently reclassified to income statement: \n \n \n \n \n \n \n \n \n \n \n Actuarial losses \n \n \n (6) \n \n \n - \n \n \n \n \n Tax credit on actuarial losses \n \n \n  4 \n \n \n - \n \n \n \n \n Net other comprehensive (loss)/income that will not be subsequently reclassified to income statement \n \n \n (2) \n \n \n - \n \n \n \n \n Items that may be subsequently reclassified to income statement: \n \n \n \n \n \n \n \n \n \n \n Fair value (losses)/gains on cash flow hedges \n \n \n (545) \n \n \n 3,168 \n \n \n \n \n Tax credit/(charge) on cash flow hedges \n \n \n 379 \n \n \n (2,376) \n \n \n \n \n Exchange differences on translation \n \n \n  130 \n \n \n 103 \n \n \n \n \n Net other comprehensive (loss)/income that may be subsequently reclassified to income statement \n \n \n  (36) \n \n \n 895 \n \n \n \n \n Other comprehensive (loss)/income for the year, net of tax \n \n \n  (38) \n \n \n 895 \n \n \n \n \n Total comprehensive (loss)/income for the year \n \n \n (131) \n \n \n 940 \n \n \n \n \n Total comprehensive income attributable to: \n \n \n \n \n \n \n \n \n \n \n Equity owners of the company \n \n \n (146) \n \n \n 940 \n \n \n \n \n Subordinated notes investors \n \n \n 15 \n \n \n - \n \n \n \n \n \n \n \n (131) \n \n \n 940 \n \n \n \n \n   \n \n \n   \n Consolidated balance sheet \n For the year ended 31 December 2024 \n \n \n \n \n \n \n \n Note \n \n \n 2024 \n $ million \n \n \n 2023 \n As restated \n $ million \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Goodwill \n \n \n 10 \n \n \n 5,147 \n \n \n 1,302 \n \n \n \n \n Other intangible assets \n \n \n 11 \n \n \n 5,714 \n \n \n 1,172 \n \n \n \n \n Property, plant and equipment \n \n \n 12 \n \n \n 14,543 \n \n \n 4,836 \n \n \n \n \n Right-of-use assets \n \n \n 13 \n \n \n 656 \n \n \n 632 \n \n \n \n \n Deferred tax assets \n \n \n 8 \n \n \n 130 \n \n \n 7 \n \n \n \n \n Other receivables \n \n \n 16 \n \n \n 176 \n \n \n 309 \n \n \n \n \n Other financial assets \n \n \n 23 \n \n \n 44 \n \n \n 112 \n \n \n \n \n Total non-current assets \n \n \n \n \n \n 26,410 \n \n \n 8,370 \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Inventories \n \n \n 15 \n \n \n 368 \n \n \n 217 \n \n \n \n \n Trade and other receivables \n \n \n 16 \n \n \n 2,316 \n \n \n 873 \n \n \n \n \n Other financial assets \n \n \n 23 \n \n \n 145 \n \n \n 170 \n \n \n \n \n Cash and cash equivalents \n \n \n 17 \n \n \n 805 \n \n \n 286 \n \n \n \n \n \n \n \n \n \n \n 3,634 \n \n \n 1,546 \n \n \n \n \n Assets held for sale \n \n \n 18 \n \n \n 277 \n \n \n - \n \n \n \n \n Total current assets \n \n \n \n \n \n 3,911 \n \n \n 1,546 \n \n \n \n \n Total assets \n \n \n \n \n \n 30,321 \n \n \n 9,916 \n \n \n \n \n Equity and liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share capital \n \n \n 25 \n \n \n 171 \n \n \n 171 \n \n \n \n \n Merger reserve \n \n \n 25 \n \n \n 3,728 \n \n \n 271 \n \n \n \n \n Other reserves \n \n \n \n \n \n (18) \n \n \n 18 \n \n \n \n \n Retained earnings \n \n \n \n \n \n 807 \n \n \n 1,093 \n \n \n \n \n Equity attributable to equity holders of the company \n \n \n \n \n \n 4,688 \n \n \n 1,553 \n \n \n \n \n Equity attributable to subordinated notes investors \n \n \n 26 \n \n \n 1,563 \n \n \n - \n \n \n \n \n Total equity \n \n \n \n \n \n 6,251 \n \n \n 1,553 \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Borrowings \n \n \n 22 \n \n \n 4,215 \n \n \n 493 \n \n \n \n \n Provisions \n \n \n 21 \n \n \n 7,024 \n \n \n 3,905 \n \n \n \n \n Deferred tax \n \n \n 8 \n \n \n 6,221 \n \n \n 1,297 \n \n \n \n \n Trade and other payables \n \n \n 20 \n \n \n 30 \n \n \n 13 \n \n \n \n \n Lease creditor \n \n \n 13 \n \n \n 551 \n \n \n 552 \n \n \n \n \n Other financial liabilities \n \n \n 23 \n \n \n 415 \n \n \n 87 \n \n \n \n \n Total non-current liabilities \n \n \n \n \n \n 18,456 \n \n \n 6,347 \n \n \n \n \n \n \n   \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n 20 \n \n \n 1,755 \n \n \n 915 \n \n \n \n \n Borrowings \n \n \n 22 \n \n \n 1,014 \n \n \n 16 \n \n \n \n \n Lease creditor \n \n \n 13 \n \n \n 241 \n \n \n 216 \n \n \n \n \n Provisions \n \n \n 21 \n \n \n 497 \n \n \n 230 \n \n \n \n \n Current tax liabilities \n \n \n \n \n \n 1,412 \n \n \n 442 \n \n \n \n \n Other financial liabilities \n \n \n 23 \n \n \n 462 \n \n \n 197 \n \n \n \n \n \n \n \n \n \n \n 5,381 \n \n \n 2,016 \n \n \n \n \n Liabilities directly associated with the assets held for sale \n \n \n 18 \n \n \n 233 \n \n \n - \n \n \n \n \n Total current liabilities \n \n \n \n \n \n 5,614 \n \n \n 2,016 \n \n \n \n \n Total liabilities \n \n \n \n \n \n 24,070 \n \n \n 8,363 \n \n \n \n \n Total equity and liabilities \n \n \n \n \n \n 30,321 \n \n \n 9,916 \n \n \n \n \n   \n The following notes form part of these financial statements. \n The financial statements were approved by the board of directors and authorised for issue on 5 March 2025 and signed on its behalf by: \n Alexander Krane \n Chief Financial Officer \n \n \n \n Consolidated statement of changes in equity \n For the year ended 31 December 2024 \n \n \n \n \n \n \n \n Share capital \n $ million \n \n \n Merger \n reserve 1 \n $ million \n \n \n Capital \n redemption \n reserve \n $ million \n \n \n Cash flow \n hedge \n reserve 2 \n $ million \n \n \n Costs of \n hedging \n reserve 2 \n $ million \n \n \n Currency \n translation \n reserve \n $ million \n \n \n Retained \n earnings \n $ million \n \n \n Equity \n attributable \n to owners of \n the company \n $ million \n \n \n Equity \n attributable to sub-ordinated \n notes investors \n $ million \n \n \n Total \n equity \n $ million \n \n \n \n \n At 1 January 2023 \n \n \n 171 \n \n \n 271 \n \n \n 8 \n \n \n (776) \n \n \n (9) \n \n \n (100) \n \n \n 1,456 \n \n \n 1,021 \n \n \n - \n \n \n 1,021 \n \n \n \n \n Profit for the year as restated \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 45 \n \n \n 45 \n \n \n - \n \n \n 45 \n \n \n \n \n Other comprehensive income \n \n \n - \n \n \n - \n \n \n - \n \n \n 779 \n \n \n 13 \n \n \n 103 \n \n \n - \n \n \n 895 \n \n \n - \n \n \n 895 \n \n \n \n \n Total comprehensive income as restated \n \n \n - \n \n \n - \n \n \n - \n \n \n 779 \n \n \n 13 \n \n \n 103 \n \n \n 45 \n \n \n 940 \n \n \n - \n \n \n 940 \n \n \n \n \n Purchase and cancellation of own shares \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (249) \n \n \n (249) \n \n \n - \n \n \n (249) \n \n \n \n \n Share-based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 46 \n \n \n 46 \n \n \n - \n \n \n 46 \n \n \n \n \n Purchase of ESOP trust shares \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (15) \n \n \n (15) \n \n \n - \n \n \n (15) \n \n \n \n \n Dividend paid \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (190) \n \n \n (190) \n \n \n - \n \n \n (190) \n \n \n \n \n At 31 December 2023 as restated \n \n \n 171 \n \n \n 271 \n \n \n 8 \n \n \n 3 \n \n \n 4 \n \n \n 3 \n \n \n 1,093 \n \n \n 1,553 \n \n \n - \n \n \n 1,553 \n \n \n \n \n (Loss)/profit for the year \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (108) \n \n \n (108) \n \n \n 15 \n \n \n (93) \n \n \n \n \n Other comprehensive (loss)/income \n \n \n - \n \n \n - \n \n \n - \n \n \n (188) \n \n \n 22 \n \n \n 130 \n \n \n (2) \n \n \n (38) \n \n \n - \n \n \n (38) \n \n \n \n \n Total comprehensive (loss)/income \n \n \n - \n \n \n - \n \n \n - \n \n \n (188) \n \n \n 22 \n \n \n 130 \n \n \n (110) \n \n \n (146) \n \n \n 15 \n \n \n (131) \n \n \n \n \n Issue of new shares \n \n \n - \n \n \n 3,457 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 3,457 \n \n \n - \n \n \n 3,457 \n \n \n \n \n Share-based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 48 \n \n \n 48 \n \n \n - \n \n \n 48 \n \n \n \n \n Purchase of ESOP trust shares \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (25) \n \n \n (25) \n \n \n - \n \n \n (25) \n \n \n \n \n Acquired through business combination \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1,548 \n \n \n 1,548 \n \n \n \n \n Dividends paid \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (199) \n \n \n (199) \n \n \n - \n \n \n (199) \n \n \n \n \n At 31 December 2024 \n \n \n 171 \n \n \n 3,728 \n \n \n 8 \n \n \n (185) \n \n \n 26 \n \n \n 133 \n \n \n 807 \n \n \n 4,688 \n \n \n 1,563 \n \n \n 6,251 \n \n \n \n \n 1 The increase in the merger reserve represents the difference between the fair value and nominal value of the shares issues as consideration for the acquisition of the Wintershall Dea assets. \n 2 Disclosed net of deferred tax. \n \n \n \n Consolidated statement of cash flows \n For the year ended 31 December 2024 \n \n \n \n \n \n \n \n Note \n \n \n 2024 \n $ million \n \n \n 2023 \n As restated \n $ million \n \n \n \n \n Net cash flows from operating activities \n \n \n 29 \n \n \n 1,615 \n \n \n 2,150 \n \n \n \n \n Investing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Expenditure on exploration and evaluation assets \n \n \n \n \n \n (359) \n \n \n (202) \n \n \n \n \n Expenditure on property, plant and equipment \n \n \n 12 \n \n \n (884) \n \n \n (496) \n \n \n \n \n Expenditure on non-oil and gas intangible assets \n \n \n \n \n \n (42) \n \n \n (20) \n \n \n \n \n Expenditure on other intangible assets \n \n \n \n \n \n (37) \n \n \n (81) \n \n \n \n \n Acquisition of subsidiaries, net of cash acquired \n \n \n 14 \n \n \n (1,044) \n \n \n - \n \n \n \n \n Finance income received \n \n \n \n \n \n 76 \n \n \n 93 \n \n \n \n \n Other receipts \n \n \n \n \n \n 13 \n \n \n 13 \n \n \n \n \n Net cash flows used in investing activities \n \n \n \n \n \n (2,277) \n \n \n (693) \n \n \n \n \n Financing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Repurchase of shares \n \n \n \n \n \n - \n \n \n (249) \n \n \n \n \n Proceeds from new borrowings - revolving credit facility \n \n \n 29 \n \n \n 2,225 \n \n \n - \n \n \n \n \n Proceeds from new borrowings - reserves based lending facility \n \n \n 29 \n \n \n 178 \n \n \n 660 \n \n \n \n \n Proceeds from bridge facility \n \n \n 29 \n \n \n 1,500 \n \n \n - \n \n \n \n \n Proceeds from bond issuance net of transaction costs \n \n \n 29 \n \n \n 1,720 \n \n \n - \n \n \n \n \n Payments of principal portion of lease liabilities \n \n \n \n \n \n (265) \n \n \n (207) \n \n \n \n \n Interest paid on lease liabilities \n \n \n \n \n \n (54) \n \n \n (52) \n \n \n \n \n Repayment of revolving credit facility \n \n \n 29 \n \n \n (1,975) \n \n \n - \n \n \n \n \n Repayment of reserves based lending facility \n \n \n 29 \n \n \n (178) \n \n \n (1,435) \n \n \n \n \n Repayment of bridge facility \n \n \n 29 \n \n \n (1,500) \n \n \n - \n \n \n \n \n Repayment of exploration financing facility \n \n \n \n \n \n - \n \n \n (11) \n \n \n \n \n Repayment of financing arrangement \n \n \n 29 \n \n \n (17) \n \n \n (21) \n \n \n \n \n Purchase of ESOP trust shares \n \n \n \n \n \n (25) \n \n \n (12) \n \n \n \n \n Interest paid and bank charges \n \n \n \n \n \n (181) \n \n \n (150) \n \n \n \n \n Dividends paid to shareholders \n \n \n 31 \n \n \n (199) \n \n \n (190) \n \n \n \n \n Net cash inflow/(outflow) from financing activities \n \n \n \n \n \n 1,229 \n \n \n (1,667) \n \n \n \n \n Net increase/(decrease) in cash and cash equivalents \n \n \n \n \n \n 567 \n \n \n (210) \n \n \n \n \n Net foreign exchange difference \n \n \n \n \n \n (37) \n \n \n (4) \n \n \n \n \n Reclassification of Vietnam cash as asset held for sale \n \n \n \n \n \n (11) \n \n \n - \n \n \n \n \n Cash and cash equivalents at 1 January \n \n \n \n \n \n 286 \n \n \n 500 \n \n \n \n \n Cash and cash equivalents at 31 December \n \n \n \n \n \n 805 \n \n \n 286 \n \n \n \n \n   \n   \n \n \n   \n Notes to the condensed consolidated financial statements \n 1.   Corporate information \n Harbour Energy plc is a limited liability company incorporated in Scotland and listed on the London Stock Exchange. The address of the registered office is 4th Floor, Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2EN, United Kingdom. \n The consolidated financial statements of Harbour Energy plc (Harbour or the company) and all its subsidiaries (the Group) for the year ended 31 December 2024 were authorised for issue by the board of directors on 5 March 2025. \n On 3 September 2024, the Group completed the acquisition of substantially all of Wintershall Dea's upstream oil and gas assets, including those in Norway, Germany, Denmark, Argentina, Mexico, Egypt, Libya and Algeria as well as Wintershall Dea's CCS licences in Europe. Under IFRS 3 Business Combinations, the Group is the legal and accounting acquirer as it obtained control over the Wintershall Dea portfolio through the business combination: as it was the entity that issued equity and paid cash to effect the business combination; at completion then existing Harbour Energy shareholders held a majority of voting ordinary shares; and from completion, day-to-day management of the enlarged group has been led by existing Harbour Energy personnel, with no change to the executive directorship. \n The Group has designated 1 September 2024 as the acquisition date (beginning of month) rather than the actual acquisition date of 3 September 2024 (during the month) as the events between the designated acquisition date and the actual acquisition date do not result in material changes in the amounts recognised. \n The acquired Wintershall Dea portfolio results are fully consolidated in the financial statements from 1 September 2024, and all results prior to this date represent those of the legacy Harbour group only. \n The Group's principal activities are the acquisition, exploration, development and production of oil and gas reserves in Norway, the UK, Germany, Mexico, Argentina, North Africa and Southeast Asia. \n 2.   Material accounting policies \n Basis of preparation \n The consolidated financial statements have been prepared on a going concern basis in accordance with UK-adopted International Accounting Standards (IAS) in conformity with the requirements of the Companies Act 2006. The analysis used by the directors in adopting the going concern basis considers the various plans and commitments of the Group as well as various sensitivity and reverse stress test analyses. The results from the severe but plausible downside sensitivities and reverse stress tests with regard to production and commodity price assumptions, which in management's view reflect two of the principal risks, indicate that material changes within one year that would impact the going concern basis of preparation are remote. \n In 2023, the Vietnam Business Unit was classified as an asset held for sale however because this deal did not complete the prior year accounts have been restated to classify the assets and liabilities back to their original balance sheet line items. \n The presentation currency of the Group financial information is US dollars and all values in the Group financial information are presented in millions ($ million) and all values are rounded to the nearest 1 million, except where otherwise stated. \n The financial statements have been prepared on the historical cost basis, except for certain financial assets and liabilities, including derivative financial instruments, which have been measured at fair value. \n The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 31 December 2024. All accounting policies are consistent with those adopted and disclosed in Harbour's 2023 Annual Report & Accounts. \n Basis of consolidation \n The consolidated financial statements comprise the financial statements of the company and its subsidiaries as at 31 December 2024. Subsidiaries are those entities over which the Group has control. Control is achieved where the Group has the power over the subsidiary, has rights, or is exposed to variable returns from the subsidiary and has the ability to use its power to affect its returns. All subsidiaries are 100 per cent owned by the Group, except for four entities holding interests in operations in North Africa and CCS projects which are accounted for as joint operations. \n Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the company and to the subordinated notes investors. \n If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value. \n The results of subsidiaries acquired or disposed of during the year are included in the income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries acquired to bring the accounting policies used into line with those used by other members of the Group. \n All intra-group transactions and balances have been eliminated on consolidation. \n Prior year adjustment \n In August 2023, Harbour announced that it had entered into a sale and purchase agreement (SPA) to sell its business in Vietnam, which holds its 53.125 per cent interest in Chim Sáo and Dua producing fields to Big Energy Joint Stock Company for a consideration of $84 million. At 31 December 2023, the assets and liabilities of Vietnam were classified as assets held for sale (AHFS). The transaction, which had a long-stop date of 10 May 2024, could not be completed within the required timeframe, and was subsequently terminated on 13 May 2024, and as a result the Vietnam business was no longer classified as AHFS. The relevant amounts presented as AHFS in the 31 December 2023 consolidated financial statements have been reclassified. Each of the affected financial statement line items has been restated and the impact is summarised in the following table. \n \n \n   \n Balance sheet at 31 December 2023 \n \n \n \n \n \n \n \n As previously reported \n $ million \n \n \n Adjustments \n $ million \n \n \n As restated \n $ million \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Property, plant and equipment \n \n \n 4,717 \n \n \n 119 \n \n \n 4,836 \n \n \n \n \n Right-of-use assets \n \n \n 587 \n \n \n 45 \n \n \n 632 \n \n \n \n \n Other receivables \n \n \n 184 \n \n \n 125 \n \n \n 309 \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Inventories \n \n \n 200 \n \n \n 17 \n \n \n 217 \n \n \n \n \n Trade and other receivables \n \n \n 832 \n \n \n 41 \n \n \n 873 \n \n \n \n \n Cash and cash equivalents \n \n \n 280 \n \n \n 6 \n \n \n 286 \n \n \n \n \n Assets held for sale \n \n \n 334 \n \n \n (334) \n \n \n - \n \n \n \n \n Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n Retained earnings \n \n \n 1,080 \n \n \n 13 \n \n \n 1,093 \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Provisions \n \n \n 3,818 \n \n \n 87 \n \n \n 3,905 \n \n \n \n \n Deferred tax \n \n \n 1,260 \n \n \n 37 \n \n \n 1,297 \n \n \n \n \n Lease creditor \n \n \n 474 \n \n \n 78 \n \n \n 552 \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n 886 \n \n \n 29 \n \n \n 915 \n \n \n \n \n Lease creditor \n \n \n 199 \n \n \n 17 \n \n \n 216 \n \n \n \n \n Liabilities directly associated with the assets held for sale \n \n \n 242 \n \n \n (242) \n \n \n - \n \n \n \n \n \nFrom the point of classification as AHFS in August 2023, no depreciation was recorded. In addition, at 31 December 2023, a pre-tax impairment of $38 million was recognised as the fair value less cost to sell was below the carrying amount of the disposal group. As a result of the reclassification from AHFS, the impairment of $38 million has been reversed and additional depreciation covering the period August 2023 to December 2023 has been recorded, on property, plant and equipment of $14 million and on right-of-use assets of $5 million, with net deferred tax of $6 million associated with the impairment reversal and depreciation. As a result of the above adjustments, retained earnings increased by $13 million. \n In December 2024, the Group entered into an exclusivity agreement to sell its business in Vietnam to EnQuest for a consideration of $84 million. The transaction has an effective date of 1 January 2024. As a result, the assets and liabilities of Vietnam have been classified as held for sale as at 31 December 2024 (see note 18). \n Significant accounting judgements and estimates \n The preparation of the Group's financial statements in conformity with UK-adopted IAS requires management to make judgements, estimates and assumptions at the date of the financial statements. Estimates and assumptions are continuously evaluated and are based on management experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the assets or liabilities affected in future periods. \n In preparing these financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses including those that have the potential to materially impact the balance sheet over the next twelve months. Actual results may differ from these estimates. \n The significant judgements made by management in applying the Group's accounting policies, and the key sources of estimation uncertainty, were the same as those described in Harbour's 2023 Annual Report & Accounts, with the addition of the purchase price allocation that involved a number of judgements in regard to assessing the fair value of assets and liabilities acquired from Wintershall Dea. \n Judgements \n \n \n \n \n § \n \n \n Significant accounting judgements considered by the Group are: \n \n \n \n \n § \n \n \n The carrying value of intangible exploration and evaluation assets, in relation to whether commercial determination of an exploration prospect had been reached; \n \n \n \n \n § \n \n \n The carrying value of property, plant and equipment regarding assessing assets for indicators of impairment; \n \n \n \n \n § \n \n \n Decommissioning costs in relation to the timing of when decommissioning would occur; and \n \n \n \n \n § \n \n \n Tax including assessment of risks around tax uncertainties and the recognition of deferred tax assets (see note 8 below). \n \n \n \n \n Key sources of estimation uncertainty \n Details of the Group's critical accounting estimates are set out in these financial statements and are: \n \n \n \n \n § \n \n \n Purchase price allocation that involved a number of judgemental estimates in determining the fair values the fair value of assets and liabilities acquired from Wintershall Dea. See note 14 for further information; \n \n \n \n \n § \n \n \n The carrying value of property, plant and equipment and goodwill, where the key assumptions relate to oil and gas prices expected to be realised and the estimation of 2P reserves and production profiles. See notes 10 and 12 for further information; \n \n \n \n \n § \n \n \n Decommissioning costs where the key assumptions relate to the discount and inflation rates applied, applicable rig rates and expected timing of cessation of production (COP) on each field. See note 21 for further information; \n \n \n \n \n § \n \n \n Defined benefit obligations due to volatility arising from actuarial assumptions, such as the discount rate and pension growth. See note 28 for further information; \n \n \n \n \n § \n \n \n The provision for, or disclosure of, areas of uncertainty for tax purposes where the key assumptions are driven by technical analysis corroborated by external advice, and \n \n \n \n \n § \n \n \n Recognition of deferred tax assets and liabilities, where key assumptions relate to oil and gas prices expected to be realised, and production profiles. See note 8 for further information. \n \n \n \n \n Disclosure regarding the judgements and estimates made in assessing the impact of climate change and the energy transition are described below and references to notes in the financial statements are provided. \n The results from downside sensitivities prepared with regard to production and commodity price assumptions, which in management's view reflect the principal risks, indicate that material changes that would impact the carrying amounts of assets and liabilities within the next financial year are unlikely. \n Impact of climate change on the financial statements and related disclosures \n Judgements and estimates made in assessing the impact of climate change and the energy transition \n Harbour monitors global climate change and energy transition developments and plans. Management recognises there is a general high level of uncertainty about the speed and scale of impacts which, together with limited historical information, provides challenges in the preparation of forecasts and plans with a range of possible future scenarios, which may have the potential to materially impact the balance sheet. \n The Group's strategic ambition is to achieve Net Zero by 2050 with an interim target of a 50 per cent reduction in Scope 1 and 2 emissions by 2030 against the 2018 baseline. This will be achieved through several opportunities, including operational efficiency improvements, targeted decarbonisation projects and the eventual cessation of production of mature fields. In addition, the company is investing in the development of CCS projects in the UK and Europe. \n All new economic investment decisions include the cost of carbon, and opportunities are assessed on their climate-impact potential and alignment with Harbour Energy's net zero aspiration taking into consideration both GHG volumes and intensity. The acquisition during the year has helped to advance our energy transition objective by strategically shifting our portfolio towards natural gas. Over time this move is expected to notably reduce our greenhouse gas intensity on a net equity basis. The corporate modelling that supports the preparation of the financial statements (such as asset and goodwill impairment assessment, going concern and viability, deferred tax asset recoverability) includes project costs related to CCS, certain decarbonisation projects once sanctioned, other activities to reduce gross operated Scope 1 and 2 GHG emissions, the UK and EU Emissions Trading Scheme costs and carbon offset purchases. Emissions reduction incentives are part of staff remuneration through the annual bonus programme. \n Climate change and the energy transition have the potential to significantly impact the accounting estimates adopted by management and therefore the valuation of assets and liabilities reported on the balance sheet. On an ongoing basis, management continues to assess the potential impacts on the significant judgements and estimates used in the preparation of the financial statements. Estimates adopted in the financial statements reflect management's best estimate of future market conditions where, in particular, commodity prices can be volatile. Commodity and carbon price curve assumptions are described below noting that there is consideration given to other assumptions, not exhaustively, such as foreign exchange and discount rates. Notwithstanding the challenges around climate change and the energy transition, it is management's view that the financial statements are consistent with the disclosures in the Strategic Report. \n This note provides insight into how Harbour has considered the impact on valuations of key line items in the financial statements and how they could change based on the climate change scenarios and sensitivities considered. The scenarios presented show what the possible impact could be on the financial statements considering both high and low commodity and carbon price outlooks plus discount rates range. Importantly, these climate change scenarios do not form the basis of the preparation of the financial statements but rather indicate how the key assumptions that underpin the financial statements would be impacted by the climate change scenarios. They are also designed to challenge management's perspective on the future business environment. It is recognised that the reality of the nature of progress of energy transition will bring greater levels of disruption and volatility than these external scenarios expect and do not represent management's current best estimate. \n The financial statements have been prepared using management's current best estimate for the foreseeable future, based on a range of economic forecasts and represented by the Harbour scenario oil price curve. Management regularly reviews these estimates and assumptions to ensure they align with the latest economic conditions and market information. \n Property, plant and equipment, and goodwill \n Transitioning to lower carbon energy as the energy transition progresses has the potential to significantly impact future commodity and carbon prices which would, in turn, affect the future operating and capital costs, estimates of cessation of production, useful lives, and consequently the recoverable amount of property, plant and equipment and goodwill. \n The non-current assets of the Group, particularly goodwill and oil and gas assets within property, plant and equipment, are considered to be the most sensitive to the energy transition. The carrying value of these assets and goodwill notably increased during the year, primarily attributed to the completion of the Wintershall Dea acquisition in the second half of the year. \n Depreciation, estimated useful life and risk of stranded assets \n The energy transition and the rate of its progression may impact the remaining lifespan of assets. Typically, the Group's oil and gas assets are depreciated using a unit of production method, which is based on the ratio of production in the year to the commercial proven and probable reserves of the field, considering future capital development expenditures. \n As at 31 December 2024, the Group's production plans for existing assets indicated that 44 per cent, 18 per cent and nil per cent of the commercial proven and probable reserves would remain by 2030, 2035, and 2050, respectively. Using the unit of production depreciation method, the carrying amounts for the oil and gas assets are depreciated in line with the depletion of reserves. An evaluation of the oil and gas assets as at 31 December 2024 indicated that the oil and gas assets would experience significant additional depreciation by 2030 and near-complete depreciation by 2035, based on the planned depletion of reserves. \n This indicates that a substantial portion of proven and probable reserves are anticipated to be produced by 2035, resulting in lower risk of stranded assets being carried in the consolidated balance sheet. The Group's portfolio management approach aims to mitigate the risk of stranded assets in the event of a faster-than-expected structural decline in demand for oil and gas due to tighter environmental regulations, changes in market demands and global energy demand. \n Impairment of property, plant and equipment, and goodwill \n The important assumptions for impairment testing of goodwill and oil and gas assets applied to the life of fields production and cost profiles include commodity and carbon prices and discount rates. These key assumptions are carefully assessed by management, both in isolation and in aggregate, to ensure there is a fair and balanced view attained with minimal aggregate bias. These assumptions are inherently uncertain and may ultimately diverge from the actual amounts. \n During the current year's impairment testing, the Harbour scenario utilised real long-term commodity price assumptions from 2028 for Brent crude at $78 per barrel (2023: $70 per barrel), UK NBP...

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