Harbour Energy narrows production guidance upwards after solid Q3

(Sharecast News) - Harbour Energy raised its full-year production guidance and reaffirmed its $1bn free cash flow target on Wednesday, after reporting a sharp rise in output and continued cost discipline for the first nine months of 2025. Production averaged 473,000 barrels of oil equivalent per day to the end of September, up from 177,000 equivalent daily barrels a year earlier, reflecting the full contribution from the Wintershall Dea assets, including 165,000 barrels per day from Norway and 75,000 barrels per day from Argentina.

The FTSE 250 company narrowed its 2025 production guidance range to between 465,000 and 475,000 barrels of oil equivalent per day, up from 460,000 to 475,000 equivalent daily barrels previously, despite the sale of its Vietnam operations in July.

Unit operating costs fell about 30% to $13 per barrel of oil equivalent, with guidance maintained at $13.50 for the full year.

"We delivered another strong performance, driven by excellent operational execution and strict capital discipline while benefitting from our increased scale and resilience," said chief executive Linda Z Cook.

"As a result, we are improving our production guidance for the full year and reaffirming our free cash flow outlook of $1bn despite a softer commodity price environment."

Cook said progress on strategic projects in Mexico and Argentina would support future growth.

"We also made good progress across our strategic projects including at Zama and Kan in Mexico and Southern Energy LNG in Argentina, underpinning longer term material production and cash flow," she said.

Revenue for the period rose to $7.6bn from $3.1bn a year earlier, driven by higher volumes.

Realised post-hedge oil and European gas prices averaged $71 per barrel and $13.40 per thousand standard cubic feet respectively, compared with $82 and $9.10 a year earlier.

Capital expenditure totalled about $1.6bn, with full-year guidance trimmed to $2.4bn from up to $2.5bn on reduced UK activity and rescheduled drilling in Argentina and Mexico.

Harbour said it maintained a strong balance sheet, with net debt of $4.2bn at the end of September, up slightly from mid-year levels.

It repaid €1bn of senior notes in September and said all remaining maturities through 2028 were pre-funded.

The group paid an interim dividend of $227.5m in September and launched a $100m share buyback in August, bringing expected total shareholder payouts for 2025 to around 55% of free cash flow.

Harbour highlighted ongoing progress across its development portfolio, including the Southern Energy LNG project in Argentina, where major contracts and regulatory approvals had been secured following a final investment decision earlier this year.

In Mexico, Harbour submitted a phased development plan for the 750 million-barrel Zama oilfield, and was preparing to launch front-end engineering and design for the Kan field in 2026 after a 50% upgrade in estimated resources.

Harbour also reported advances in exploration and development work in Indonesia and Egypt, alongside continued portfolio streamlining through divestments and licence exits.

The board also noted that credit ratings from S&P, Moody's and Fitch all remained at investment grade with stable outlooks.

At 0858 GMT, shares in Harbour Energy were up 1.43% at 233.7p.

Reporting by Josh White for Sharecast.com.