Harbour Energy (LON:HBR) reported record first-half production and raised its full-year free cash flow outlook, citing strong operational execution, contributions from newly acquired U.S. assets and elevated oil and European gas prices.
Chief Executive Officer Linda Cook said the company averaged more than 500,000 barrels of oil equivalent per day during the first half, supported by Norway and the recently acquired LLOG Exploration business in the U.S. Gulf of Mexico. Harbour lifted production guidance for the second time this year to 490,000 to 500,000 boe/d for 2026.
Portfolio reshaped through acquisitions and divestments
Cook said Harbour’s strategy has focused on building scale and diversification, initially in the U.K. and later through the 2024 Wintershall Dea acquisition. The company has since completed the acquisitions of LLOG Exploration and Waldorf, while exiting Indonesia and previously divesting its Vietnam assets.
The LLOG transaction added operated, oil-weighted assets in the U.S. Gulf of Mexico, which has become a new core country for Harbour. The Waldorf acquisition, completed after the reporting period, increased Harbour’s interest in the operated Catcher field and is expected to produce financial and operational synergies, according to management.
Chief Operating Officer Nigel Hearne said Harbour’s portfolio is now concentrated in five core countries, accounting for roughly 85% to 90% of production, reserves and resources. The company is increasingly weighted toward lower-cost and lower-tax basins, with future growth expected from the U.S., Norway, Argentina and, over time, Mexico.
Norway outperformance and U.S. growth plans
First-half production averaged 509,000 boe/d, while July production averaged 510,000 boe/d. Hearne said strong reliability and new wells in Argentina, the U.S. and Norway supported the results. Norway outperformed during the period and remains Harbour’s largest producing business and a major supplier of gas to Europe.
Harbour delivered first gas from the operated Dvalin North project ahead of schedule and under budget, Hearne said. Accelerated project activity raised the number of Norwegian developments expected online during 2026 to five from three. The company approved the Joya subsea project and is targeting final investment decisions on five additional Norwegian projects this year.
In the Gulf of Mexico, first-half production was 33,000 boe/d. Harbour expects U.S. output to rise to 65,000 to 70,000 boe/d by 2028. The company cited stronger-than-expected performance from the fifth Buckskin well and above-plan initial rates from a Who Dat sidetrack. It expects to approve the Who Dat East development during August and plans additional drilling following the arrival of a second rig.
In Argentina, production averaged 74,000 boe/d, underpinned by offshore gas output. Harbour is advancing development work in the Vaca Muerta shale play and said the Southern Energy LNG export project remains on track to start at the end of 2027.
In Mexico, the company continued to optimize the Zama and Kan developments. Invitations to tender for major Zama front-end engineering and design packages are expected shortly, while Harbour expects to sign a preliminary FPSO agreement by the end of the month. Hearne said the company remains on track for final investment decision readiness on Zama and Kan by the end of 2027. Zama’s early production is targeted for late 2029, depending on the final development concept.
Financial results and capital returns
Chief Financial Officer Alexander Krane said revenue rose more than 20% from the first half of 2025 and adjusted EBITDA increased 15%, aided by higher production and commodity prices. Adjusted after-tax profit rose 37% to £562 million, while adjusted earnings per share increased 27% to £0.28.
Harbour reported first-half operating cash flow of £4.5 billion, total capital expenditure of £1 billion and tax payments of £1.5 billion. Krane said the company generated $1.8 billion of free cash flow in the first half, although he noted that the period benefited from tax-payment timing. Second-half cash taxes are expected to be about 60% higher, at approximately £2.4 billion.
Net debt stood at £5.4 billion at the end of the period, with leverage at 0.7 times, below Harbour’s through-cycle target of less than one times. The company also refinanced its £3 billion revolving credit facility in July, extending maturity to 2031 and reducing the margin by 30%.
- Oil realizations were $90 per barrel before hedging and $84 per barrel after hedging.
- European gas realizations were $15 per Mcf before hedging and $14.40 per Mcf after hedging.
- Harbour expects at least $800 million of shareholder returns in 2026 under its distribution policy, including a $150 million interim dividend and the new $250 million buyback.
For the second half, Hearne said production is expected to be lower than the first half because of planned maintenance shutdowns and an allowance for potential hurricane disruption in the Gulf of Mexico. Management said it has not raised capital spending despite stronger cash generation, instead prioritizing debt reduction and shareholder distributions.
Cook said Harbour expects to invest $2 billion to $2.3 billion annually from 2027, supporting production of 475,000 to 500,000 boe/d through the end of the decade.
About Harbour Energy (LON:HBR)
Harbour Energy is the largest London-listed independent oil and gas company with significant positions in Norway, the UK, Germany, Argentina, Mexico, North Africa and South East Asia.
