Harbour Energy Reports 84% Production Surge and $3.2bn US Acquisition in 2025 Update

Harbour Energy’s 2025 performance: big volume, lean costs, stronger cash

Harbour Energy has delivered an 84% surge in production and a sharp improvement in free cash flow for 2025, helped by a full year from the Wintershall Dea assets and tight cost control. Despite softer oil, the group finished the year with lower unit costs, higher revenue and a stronger balance sheet ahead of a transformational US deal.

Here are the standout numbers and why they matter for investors.

Key 2025 figures at a glance

Metric	2025	2024	Comment
Production (kboepd)	474	258	Up 84% to the top end of guidance
Product mix	c.40% liquids, 40% Europe gas, 20% other gas	–	Diversified cash flow mix
Unit operating costs ($/boe)	$13.0	$16.5	c.20% lower, better than guidance
Realised prices	$69/bbl oil; $13/mscf EU gas; $4/mscf other gas	$82/bbl; $11/mscf; $4/mscf	Oil softer, EU gas stronger
Revenue	$10.3 billion	$6.2 billion	+66% on higher volumes
EBITDAX	c.$7.1 billion	$4.0 billion	+78% operational uplift
Total capex (incl. decom.)	$2.3 billion	$1.8 billion	Below c.$2.4 billion guidance
Free cash flow	$1.1 billion	$0.1 billion	Upgraded vs prior outlook
Pre-swap net debt	$4.4 billion	$4.7 billion	Reduced despite c.$0.6 billion FX headwind
Leverage	0.6x	0.7x	LTM net debt/EBITDAX
Hedge book (2026)	c.50% EU gas at $11/mscf; c.40% Brent at $71/bbl	–	MTM gain $0.5 billion at year end
Safety & emissions	TRIR 1.1; 14 kgCO2/boe	1.0; 19 kgCO2/boe	Lower emissions intensity

Notes: kboepd is thousand barrels of oil equivalent per day. EBITDAX is EBITDA before exploration expense.

Where the growth came from: Norway, Argentina and Wintershall Dea

Production averaged 474 kboepd, chiefly from the integrated Wintershall Dea portfolio and strong execution across multiple hubs. Costs fell to $13.0/boe as scale benefits and higher uptime outweighed FX headwinds. Liquids and European gas each contributed about 40% of volumes, giving useful diversification.

2025 production by region (net kboepd)	2024
Norway 169	52
UK 155	149
Germany 28	10
Argentina 73	21
Mexico 10	4
North Africa 31	12
SE Asia 7	11

Operationally, Harbour brought new development wells online across Norway, the UK, Argentina, Germany and Egypt. The Fenix (Argentina) and Maria Phase 2 (Norway) projects were completed, and five Norwegian subsea tie-backs remain on track to start within 24 months, including first gas from operated Dvalin North around mid-2026.

Strategic moves: Mexico, LNG, CCS and a $3.2 billion US acquisition

Strategically, 2025 was busy. In Mexico, Harbour took operatorship of the c.750 mmboe gross Zama oil field (32%) and submitted a more capital efficient phased development plan to the regulator. Options for an FPSO at the operated Kan oil field (70%) are being matured with FEED planned later this year. In Argentina, the two-vessel Southern Energy LNG project (15%) remains on track for end-2027 with pipeline construction and the second vessel conversion underway.

Carbon capture progressed too. In Denmark, the Greensand Future project (40%) is targeting commercial operations around the end of this year, and a large onshore 3D seismic survey is underway at the operated Greenstore project. Norway licensing also advanced with nine new exploration licences awarded, four as operator.

Portfolio discipline was evident: exit from Vietnam completed, with additional exits from certain exploration blocks in Mexico and some non-core CCS licences in the Netherlands and UK.

M&A highlights: LLOG in the US Gulf, Waldorf in the UK, Indonesia sales

• LLOG Exploration acquisition in the US – $3.2 billion: a scale entry into the US Gulf with a fully operated, oil-weighted portfolio. Expected completion in Q1 2026. Management expects it to be free cash flow per share accretive from 2027 and to drive material free cash flow growth.
• Waldorf acquisition in the UK – $170 million: expected to unlock c.$350 million of trapped cash and c.$900 million of tax effected UK tax losses, offering significant financial synergies. Completion targeted for Q2 2026.
• Indonesia divestments – $215 million: sale of NSBA and Tuna to sharpen portfolio quality and accelerate value creation. Completion targeted for Q2 2026.

Importantly, integration of Wintershall Dea was completed with the transitional services exited in September. Early cost savings are already in hand, with further systems simplification to come.

2026 guidance: steady operations, lower capex, and a new payout framework

For 2026, excluding the impact of the above transactions unless stated, Harbour guides to 435-455 kboepd, unit operating costs around $13.5/boe and total capex of $1.7-1.9 billion. At $65/bbl Brent and $11/mscf European gas, free cash flow is guided to around $0.6 billion. The company plans to move to a payout ratio approach, with details due on 5 March alongside full-year results.

If the LLOG, Waldorf and Indonesia deals complete during 2026 as expected, Harbour sees production rates increasing towards 500 kboepd by year end, operating costs staying below $15/boe and the effective tax rate starting to reduce, helped by limited near-term US tax payments and the acquired UK tax losses.

Hedges and sensitivities to watch

Harbour ended 2025 with a $0.5 billion mark-to-market gain on hedges. For 2026, about half of European gas exposure is hedged at $11/mscf and about 40% of oil exposure at $71/bbl. That offers some downside protection, though sensitivity remains material: a $5/bbl move in Brent or a $1/mscf move in European gas changes free cash flow by roughly $150 million, assuming mid-point production and capex.

My take: positive momentum, but execution and prices still matter

This is a strong update. Production at the top end, costs below guidance and a $1.1 billion free cash flow print in a softer oil tape all point to disciplined execution. The portfolio is broadening with high-return, short-cycle barrels in Norway and meaningful long-life growth in Mexico and the US Gulf. Emissions intensity fell to 14 kgCO2/boe, which is a helpful trend alongside growth.

The flip side: 2026 free cash flow guidance of c.$0.6 billion reflects today’s price deck, and there is completion risk on the big M&A. FX moved against them in 2025, adding c.$0.6 billion to bonds on translation, a reminder that currency can bite even with good operating performance. Safety performance was stable, though TRIR ticked up to 1.1 from 1.0.

Why this matters for shareholders

• Scale and diversification – 474 kboepd across liquids and gas broadens cash generation and reduces single-basin risk.
• Improving capital efficiency – lower unit costs, high-grading of spend and below-guidance capex signal discipline.
• Tax and cash optimisation – Waldorf’s c.$900 million tax effected UK losses and c.$350 million trapped cash release could boost post-tax cash flow.
• US Gulf growth option – LLOG adds operated, oil-weighted reserves with visibility to free cash flow per share accretion from 2027.

Key risks and watch-outs

• Deal execution – timing and approvals for LLOG, Waldorf and Indonesia exits.
• Commodity price exposure – only partial hedging; every $5/bbl or $1/mscf move shifts free cash flow by c.$150 million.
• UK decline – guidance assumes managed decline in the UK, partially offset elsewhere.
• Project delivery – Dvalin North mid-2026 and Egyptian developments need to land on time to support volumes.

What to watch next

• 5 March 2026 – full-year results and details of the new payout ratio policy.
• Transaction completions – LLOG (Q1 2026), Waldorf (Q2 2026), Indonesia exits (Q2 2026).
• Operational milestones – Dvalin North first gas mid-2026; Fayoum-Messinian first gas targeted end 2026; CCS Greensand aiming for commercial operations around year end.
• Further Norway activity – five subsea developments tracking to start within 24 months, plus nine new exploration licences awarded.

Overall, Harbour looks set up for another year of solid delivery with lower capex, stable operating costs and clear growth catalysts. If pricing holds near guidance and the US deal closes to plan, 2026 should lay the groundwork for the step-up in free cash flow they are targeting from 2027.