Harbour Energy, the leading oil and gas producer in the British North Sea, has announced plans to sell stakes in several North Sea oilfields and has revived its intentions for a potential U.S. listing. This move comes as oil and gas companies across the sector are scaling back investments in response to anticipated tax increases.
Following the election of the Labour government in July, there is a renewed focus on utilizing revenue from oil and gas to fund renewable energy initiatives. UK Finance Minister Rachel Reeves is expected to announce these tax increases in her budget statement on October 30.
In light of these developments, Harbour Energy is progressing with the sale of interests in the Armada, Everest, Lomond, Catcher, and Tolmount fields, aiming to decrease its exposure to the North Sea.
The UK’s oil and gas sector is already feeling the impact of heavy taxation. In March, Harbour Energy reported a full-year net profit of $32 million, a figure significantly affected by lower natural gas prices and the country’s windfall tax, which eroded much of its pretax profit. Additionally, the company’s production for the fiscal year 2023 dropped to 186,000 barrels of oil equivalent per day (boe/day), down from 208,000 boe/day in 2022.
Despite these challenges, Harbour Energy has recently completed a substantial acquisition aimed at diversifying its operations beyond the North Sea, effectively more than doubling its production. In December, the company acquired the majority of upstream assets from oil and gas producer Wintershall Dea for $11.2 billion in cash and shares. This acquisition involved assets located in Denmark, Egypt, Germany, Libya, Algeria, Argentina, Mexico, and Norway, along with Wintershall Dea’s carbon-dioxide capture and storage licenses in Europe. Notably, the deal excludes assets in Russia and those associated with joint ventures involving Russian companies.
The acquisition has been met with favorable assessments; Barclays analysts stated that it will significantly transform Harbour Energy, predicting potential valuation upside. Over the past year, Harbour Energy’s shares have increased by 14.8%.
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