Harbour Energy Plc

Harbour reported record first-half production of 509,000 barrels per day, with July production averaging 510,000 barrels per day. Revenue rose more than 20% year over year, adjusted EBITDAX increased 15%, adjusted after-tax profit rose 37% to $562 million, and adjusted EPS was $0.28, up 27% versus first half 2025. Unit operating costs were $13.3 per BOE. The company generated $4.5 billion of operating cash flow, invested $1 billion of total CapEx, paid $1.5 billion in taxes, and produced $1.8 billion of free cash flow. Net debt ended at $5.4 billion and leverage was 0.7x. Guidance was raised as production guidance moved to 490,000-500,000 BOE per day and full-year free cash flow was increased to $1.8 billion from $1.4 billion, assuming Brent averages $85 per barrel and European gas $15 per Mcf for the year. Management also said full-year 2026 unit OpEx and CapEx guidance were unchanged, and that if today’s forward curves hold, free cash flow could be closer to $2 billion.

Linda Cook framed the first half as proof that Harbour’s portfolio transformation is working: the company has become larger, more diversified and increasingly weighted toward lower-cost, lower-tax basins. She emphasized that the LLOG, Waldorf and Indonesia transactions improved resilience and longevity, while record production and stronger prices pulled forward the benefits of the strategy. Her tone was confident but disciplined, repeatedly stressing that capital will go to debt reduction and shareholder returns rather than higher CapEx.

Alexander Krane highlighted the financial strength of the period, citing revenue up more than 20%, adjusted EBITDAX up 15%, adjusted after-tax profit of $562 million, adjusted EPS of $0.28 and $1.8 billion of free cash flow. He noted oil realizations of $90 per barrel pre-hedge and $84 post-hedge, and European gas realizations of $15 per Mcf pre-hedge and $14.4 post-hedge. He also pointed to $4.1 billion of liquidity, cash balances of $1.6 billion, net debt of $5.4 billion and leverage of 0.7x, plus the refinancing of the $3 billion revolver to 2031 with a 30% lower margin. On capital allocation, he said at least $800 million is expected to be returned to shareholders in 2026, including the $150 million interim dividend and the new $250 million buyback, with more still to be allocated within the 45% to 75% payout framework.

Analysts focused on the gap between first-half production and full-year guidance, capital allocation, U.K. exposure, and the timing of distributions. Management said the second-half production step-down is mainly due to planned maintenance, large shutdowns, proactive deferrals into the second half, and a placeholder for potential hurricane impact in the Gulf of America. On capital allocation, management said debt repayment remains a priority after LLOG, but strong cash flow is currently being directed to both deleveraging and shareholder returns, with no change to 2026 CapEx. In response to questions on the U.K. and M&A, Linda Cook said Harbour is not commenting on specific deals, but reiterated that the U.K. fiscal regime makes domestic projects harder to compete with opportunities in the U.S., Norway and Mexico.