Harbour Energy has returned to the black on Thursday despite the largest UK-based North Sea oil and gas firm suffering a dip in revenue and cratered free cash flow.
The producer had been a victim of the energy profit levy imposed off the back of energy price spikes in 2022, with the 75 per cent tax rate hitting its profit for much of 2023.
But the FTSE 100 constituent posted a return to profitability in the six months to June 30, with profit after tax rising to £44.9m, up from a loss of £8m in the first half of 2023.
The profit jump helped earnings per share to improve to seven cents a share, up from a loss of one cent.
Before tax, the firm's fundamentals were less rosy. Revenue fell four per cent from $2bn (£1.6bm) to $1.9bn (£1.5bn), and profit before tax was also down from $429 (£338m) m to $392m (£309m) .
Operating cash flow also fell to $953m, and free cash flow cratered from $1bn (£789m) to $383m (£302m), a number the firm expects to be "considerably higher" in 2025, it said.
Harbour improved its full year production guidance, and now expects production to be 155 to 165 kboepd (thousand barrels of oil equivalent per day), the midpoint of which is higher than a previous 150 to 165 koepd.
The London-headquartered firm's shares nudged up 1.7 per cent during morning trading.
Shortly before the reporting period, Harbour announced an $11.2bn (£8.8bn) deal for Wintershall Dea's assets, which spanned across Norway, Denmark, Mexico and Algeria.
The deal followed Wintershall losing control of its Russian assets, which were co-owned with Gazprom and seized by the Kremlin after €2bn (£1.72bn) in cash disappeared from a shared account.
Linda Cook, Harbour's chief executive, said: "During the first half of 2024 we maintained our focus on safe operations, maximising the value of our existing portfolio and advancing our organic growth projects.
"At the same time, we made significant progress towards completing the Wintershall Dea acquisition, which is now expected early in the fourth quarter.
"The acquisition will transform the scale, geographical diversity and longevity of our portfolio and strengthen our capital structure enabling us to deliver enhanced shareholder returns over the long run while also positioning us for further opportunities."
By City AM
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