Harbour Energy PLC (LSE:HBR) reported a fall in interim profit and lowered the top-end of its production guidance, pushing shares down a touch in early trading. The North Sea’s biggest operator reported pre-tax profit in the six months to June of US$0.4 billion, down from US$1.5 billion a year ago, but swung into the red after tax to the tune of US$8 million, driven by a higher UK tax rate and one-off tax charges.
It said this was mainly caused by the UK government’s introduction of the energy profits levy (EPL) driving the headline tax rate on oil and gas profits up to 75% from 40% last year. In response to the EPL, Harbour said it “scaled back our activities in certain areas and acted decisively to manage our cost structure”, including a review of its UK organisation. It expects this to deliver around US$50 million in annual savings from next year.
Production guidance was tightened to 185-195 kboepd (185-200 kboepd previously) while total capital expenditure was reduced from US$1.1 billion to US$1.0 billion due to deferral and phasing of capex. The firm said it entered the second half of the year in a strong position and expects to be net debt free in the first half of 2024.
“We will continue to return any excess capital to shareholders while investing in our existing portfolio to ensure a resilient and sustainable business and maintaining capacity for meaningful but disciplined M&A.” Analysts at Stifel said the results “illustrate the business operationally performing well”. It retained a ‘buy’ rating and 480p price target while shares were 1.8% lower at 237.80p.