Page 9 - EurOil Week 11 2023

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Harbour sees 2022 profits “wiped out”

by UK windfall tax

UK UK North Sea player Harbour Energy has said energy security,” CEO Linda Cook said. “It has
the UK’s windfall tax “wiped out” its profits last all but wiped out our profit for the year. This has
Harbour laments that year, but it still paid out $1bn in shareholder driven us to reduce our UK investment and staff-
the windfall tax wiped returns. ing levels. Given the fiscal instability and outlook
out its profits, but it is The company’s profit after tax dropped to for investment in the country, it has also rein-
still providing significant only $8mn in 2022 from $101mn in the previ- forced our strategy goal to grow and diversify
shareholder returns. ous year, although it still managed to generate internationally.”
$2.1bn in free cash flow, up from $0.7bn in 2021 Full-year production increased 19% to an
and higher than its $1.8-2.0bn guidance made average of 208,000 barrels of oil equivalent per
in August. Capital expenditure came to $0.9bn, day, with output reaching 202,000 boepd at the
while tax payments amounted to $551mn. end of February 2023. The post-hedging oil
The London-listed firm proposed a $200mn price that Harbour realised was $78 per barrel,
share buyback and a final dividend of $0.12 per up from $54 in the previous year, while UK gas
share, bringing full-year dividends to $200mn prices rose to £0.86 ($1.03) per therm, versus
and buybacks to $400mn. Since December 2021 £0.54.
it has announced $1bn of shareholder returns. Harbour reiterated its production guidance
Nevertheless, Harbour warned it intended for 2023 of 185,000-200,000 boepd. Unit oper-
to cut UK staff numbers following last year’s ating costs are set to increase to $16 per boe, as a
UK Energy Profits Levy, which ate up around result of lower output and inflationary pressure.
$1.47bn in company profits alone. At $85 per barrel oil and £1.50 per therm gas
“[The UK levy] has disproportionately prices, Harbour expects to bring in $1bn of free
impacted the UK-focused independent oil and cash flow in 2023, and it can potentially become
gas companies that are critical for domestic net debt free the following year. ™

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