2025 free cash flow outlook reinforced and production guidance upgraded

Harbour Energy has provided an unaudited Trading and Operations Update for the nine months to 30 September 2025.

Linda Z Cook, Chief Executive Officer, commented: 
"We delivered another strong performance, driven by excellent operational execution and strict capital discipline while benefitting from our increased scale and resilience. As a result, we are improving our production guidance for the full year and reaffirming our free cash flow outlook of $1 billion despite a softer commodity price environment. 

We also made good progress across our strategic projects including at Zama and Kan in Mexico and Southern Energy LNG in Argentina, underpinning longer term material production and cash flow."

Strong operational delivery

• Increased and diversified production of 473 kboepd (2024: 177 kboepd) to end of September, broadly split 40% liquids, 40% European gas and 20% other gas

  • Full contribution from Wintershall Dea assets, including 165 kboepd from Norway and 75 kboepd from Argentina

  • New wells on-stream in the third quarter including at Maria Phase 2 (Norway), J-Area (UK) and APE (Argentina) partially offset by Njord (Norway) underperformance

  • Successful completion of planned maintenance shutdowns in Norway and the UK

• Given the strong performance over the first nine months, and notwithstanding the divestment of Vietnam (5 kboepd in the first half) in July, 2025 production guidance narrowed further upwards to 465-475 kboepd (previously 460-475 kboepd)

• Unit operating costs c.30% lower at $13/boe (2024: $19/boe), reflecting the addition of the Wintershall Dea portfolio. 2025 guidance reiterated at c.$13.5/boe, with strong volumes and cost performance together with the divestment of Vietnam more than offsetting FX headwinds

• Continued focus on safety with total recordable injury rate (TRIR) of 1.0 per million hours worked (2024: 1.0); greenhouse gas intensity materially lower at 13 kgCO2/boe (2024: 23 kgCO2/boe)(1)

• High return, short cycle investments remain on track, including completion of Maria Phase 2 (Norway) with the fourth and final well due online before year-end, Dvalin North (Norway) production start-up in 2026, and further drilling at APE (Argentina) recommencing later this year

• Review of the UK organisation resulting in a reduction of 250 positions; the cumulative headcount reduction has been c.600 roles since the EPL was introduced in 2022. This aligns with significantly lower anticipated UK investment driven by the continued punitive domestic fiscal regime

• Exit from the Transition Services Agreement supporting the Wintershall Dea portfolio was completed in September as scheduled, enabling the focus to shift to systems and process simplification and driving efficiencies. Early savings have been captured including through renegotiation of supplier contracts and rationalisation of offices in Mexico and Norway

Strategic projects progressed underpinning future reserves replacement and optionality

• Continued progress at Southern Energy LNG (Argentina), a two-vessel c.6 mtpa project (Harbour 15%), following final investment decision earlier this year

  • All environmental licences, export permits and RIGI incentives now secured for both vessels

  • Major contracts awarded including the EPC contracts for the mooring system, the offshore pipeline and the compression stations

• In Mexico, regarding the 750 mmboe gross Zama oil field (Harbour 32.2%), a more capital efficient phased development plan has been submitted to the regulator for approval

• Also in Mexico, FPSO options for the Kan field (Harbour 70%, operator) are being matured with commencement of FEED targeted for 2026. This follows a successful appraisal programme which resulted in resource estimates for the field being upgraded by 50% to c.150 mmboe gross

• Evaluation of development options for the multi-TCF Andaman Sea gas play (Indonesia) continues, including a phased development of all discoveries with initial production from the Tangkulo field

• In Egypt, following exploration success early this year near our West Nile Delta infrastructure, final investment decisions for the development of Fayoum 5 and El King are targeted for 2026. Successful appraisal drilling at Disouq with further drilling planned for 2026

• Active portfolio management with the divestment of our assets in Vietnam; in addition, decisions taken to exit several exploration licences in Mexico and certain non-core CCS licences in the Netherlands and the UK

Significant free cash flow generation and delivery of capital allocation priorities

• Increased revenue for the period of $7.6 billion (2024: $3.1 billion) mainly reflecting higher production. Realised post-hedge oil and European gas prices of $71/bbl (2024: $82/bbl) and $13.4/mscf (2024: $9.1/mscf), respectively

• Total capital expenditure to end of September of c.$1.6 billion (2024: c.$1.0 billion), reflecting the addition of the Wintershall Dea portfolio. 2025 guidance lowered to c.$2.4 billion (previously $2.4-2.5 billion) driven by reduced activity in the UK, a pause in drilling at APE (Argentina) to align with domestic gas market requirements, and the reduction of some Mexico expenditures

• 2025 free cash flow outlook of c.$1.0 billion reiterated despite the lower commodity price environment(2). This reflects continued strong operational performance and improved working capital management

• An interim dividend of $227.5 million was paid in September, in line with Harbour’s $455 million annual dividend policy. In addition, Harbour initiated a $100 million share buyback in August, bringing 2025 total expected payout to c.55% based on $1 billion free cash flow outlook(3).

• Net debt of $4.2 billion ($4.1 billion post-swap) at 30 September, an increase from $3.8 billion ($3.7 billion post-swap) at half year reflecting lower production and dividend and tax payments in the third quarter

• €1 billion senior notes repaid in September with all remaining debt maturities to 2028 pre-funded

• Strong hedge position with a mark to market gain of $380 million at 30 September. For 2026, c.50% of our economic exposure to European gas prices and c.35% of our economic exposure to Brent are currently hedged, at $11.4/mscf and $72/bbl, respectively

• S&P reconfirmed Harbour’s investment grade credit rating BBB- with stable outlook in September; Moody’s and Fitch reconfirmed investment grade credit ratings of Baa2 and BBB- respectively with stable outlook in March

(1) Scope 1 and 2 emissions on a net equity basis
(2) Full year 2025 free cash flow outlook reflects the current forward curve for the remainder of the year resulting in 12 month average Brent oil and European gas prices of $68/bbl and $12.0/mscf respectively (previously $68/bbl and $12.7/mscf). A $5/bbl change in 2025 Brent oil prices or a $1/mscf change in 2025 European gas prices impacts full year free cash flow by c.$115 million, assuming a stable USD foreign exchange rate. Free cash flow outlook assumes mid-point of production and capex guidance. A 1:1 conversion rate for $/mmbtu to $/mscf has also been assumed.
(3) This assumes that the current pace of the programme is maintained resulting in c.$90m of the $100 million buyback having completed by year-end.

KeyFacts Energy: Harbour Energy UK country profile