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Harbour Energy has announced the successful completion of its acquisition of Wintershall Dea AG's upstream asset portfolio, known as the Target Portfolio, which was finalized earlier today. The acquisition, with an effective date of June 30, 2023, marks a significant milestone in Harbour’s expansion strategy.
A Growing Global Presence
Since its inception in 2014, Harbour Energy has rapidly evolved into one of the largest independent oil and gas companies worldwide. With this acquisition, Harbour's production now stands at approximately 475,000 barrels of oil equivalent (boe) per day. The company's production footprint spans key regions including Norway, the UK, Argentina, North Africa, and Germany.
Harbour's operational efficiency is bolstered by its competitive cost structure and resilient profit margins. The company holds a 2P reserve base of around 1.5 billion boe, ensuring substantial and sustainable free cash flow. Additionally, Harbour boasts 2C resources estimated at about 1.8 billion boe, which offer diverse growth opportunities. These resources include near-infrastructure prospects in Norway, scalable unconventional opportunities in Argentina, and conventional offshore projects in Mexico and Indonesia.
Commitment to Sustainability
Harbour Energy remains dedicated to producing oil and gas responsibly, with a low emissions intensity of under 15 kgCO2e/boe. The company is focused on reducing greenhouse gas emissions, eliminating non-routine flaring, and participating in several Carbon Capture and Storage (CCS) projects. These efforts align with Harbour’s commitment to meeting global energy needs while addressing environmental concerns.
Financial Structuring and Future Outlook
To finance the acquisition, Harbour issued equity valued at $4.15 billion and transferred approximately $4.9 billion in Wintershall Dea bonds. Additionally, a cash consideration of $2.15 billion was involved. This cash was partially covered by adjustments under the Business Combination Agreement and funding from Harbour’s bridge facility and existing cash reserves.
Post-acquisition, Harbour’s net debt is estimated at around $4.5 billion. This includes $3.8 billion in bonds and $1.8 billion in debt facility drawings, offset by $1.1 billion in cash, including acquired cash balances. With the acquisition enhancing Harbour’s credit quality, the company anticipates resolving its Credit Watch positive outlook with Fitch and S&P, aiming for an Investment Grade rating.
Updated Guidance for 2024
Harbour Energy has updated its 2024 guidance to reflect the integration of the Target Portfolio. The revised forecast includes 12 months of contribution from Harbour’s existing assets and four months from the newly acquired portfolio. Proforma metrics estimate production at 470-485 kboepd, with unit operating costs projected between $13-14/boe and total capital expenditure around $2.7 billion. These figures are consistent with the guidance provided by Harbour and Wintershall Dea in August 2024.
The completion of this acquisition positions Harbour Energy for continued growth and increased operational scale, reinforcing its position as a leading global energy player.
