Harbour Energy plc today said it had started to review its activities in the United Kingdom and is on course to cut some 350 onshore jobs.
UK ACTIVITY
The review, due to complete during H2 2023, is forecast to save the company $50 million annually from 2024.
In its Q1 2023 unaudited trading and operations report, Harbour said that the reduction followed an estimated $15m one-off charge for the energy profits levy (EPL).
The company has also decreased UK activity in certain areas due to the EPL, including partner cancelled programmes at Elgin Franklin and Beryl and it “rephased certain decommissioning activities”.
FINANCES
Harbour recorded estimated year revenue of $1.1 billion, reflecting increased activity post first quarter including drilling in the UK, and exploration campaigns in Indonesia and Norway.
Total capital expenditure (including decommissioning) is $0.2bn.
For Q1 2023, Harbour reported free cash flow of $0.7bn with forecast full-year free cash flow (after $450m tax payments and pre-distributions) is unchanged at $1bn, weighted to the first quarter because of summer maintenance, capital expenditure and tax.
Harbour, which was due to hold its general meeting this morning, held “significant liquidity” of $3.1bn at the end of the quarter.
Net debt reduced from $0.8bn at year end to $0.2bn at the end of March while the company maintains its potential to be net debt free in 2024.
OPERATIONS
Q1 2023 production average fell to 202 kboepd (Q1 2022: 215 kboepd), split 50-50 between liquids and gas.
New wells coming on-stream include Tolmount, J-Area and Clair, partially offsetting natural decline. The company said it was on course to meet full year guidance of 185-200 kboepd.
In March 2023, Harbour began its £200m share buyback and has to date completed $50m.
Injury rates were recorded at 0.82 per million hours worked.
The company said it continued to evaluate opportunities for merger and acquisitions and to grow and diversify internationally, in line with its strategy.
POTENTIAL
“We delivered a strong first quarter,” added chief executive Linda Z Cook.
“Continuing to invest in our portfolio while actively managing our cost base has enabled us to further deleverage our balance sheet and return additional capital to shareholders.
“At the same time, we’ve built good momentum in our international development opportunities in Mexico and Indonesia which have the potential to add materially to our reserves and future production, and in our CCS projects, all of which will lead to future diversification of our business.”