Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
Brent slowly inching back towards $80 while UK and European Gas prices are both also up today, personally, I see both HBR and O&G prices here as a grand bargain at the moment while fear is overcoming greed in what is fundamentally an amazing 2024 opportunity in HBR.
https://tradingeconomics.com/commodities
UK North Sea Review
OEUK also called for a predictable and fair tax regime in the UK to ensure stability to operators and attract more investments in the UK North Sea. The Workforce Insight report has estimated that with the right incentives and stability UK offshore energy companies would invest up to £200 billion in home-grown renewable energy.
OEUK also called for a predictable and fair tax regime in the UK to ensure stability to operators and attract more investments in the UK North Sea. The Workforce Insight report has estimated that with the right incentives and stability UK offshore energy companies would invest up to £200 billion in home-grown renewable energy.
In company news, Harbour Energy, the largest oil and gas producer in the UK North Sea, announced at the end of December that it had reached an agreement with BASF and LetterOne, the shareholders of WintershallDeaAG, for the acquisition of substantially all of WintershallDea’s upstream assets for $11.2 billion, in a deal that would transform Harbour Energy’s scale and geographic diversification.
The acquisition is expected to make Harbour one of the world’s largest and most geographically diverse independent oil and gas companies, adding material gas-weighted portfolios in Norway and Argentina and complementary growth projects in Mexico. Harbour will also benefit from an increased reserve life and improved margins with lower operating costs and greenhouse gas intensity.
The completion of the acquisition, subject to, amongst other things, regulatory, antitrust and foreign direct investment approvals, as well as Harbour shareholder approval, is expected to occur in Q4 2024.
"The addition of WintershallDea’s assets will increase our production to over 500 kboepd, extend our reserves life, and enhance our margins and cash flow, all supporting enhanced shareholder returns over the longer run,” Harbour CEO Linda Cook commented.
“Importantly, the acquisition also advances our energy transition objectives by shifting our portfolio towards natural gas, lowering our GHG emissions intensity and expanding our CCS interests into new European markets.”
https://www.ogv.energy/news-item/uk-north-sea-review
City AM
The $11.2bn acquisition: Wintershall be better with Harbour Energy
News of London-listed Harbour Energy’s blockbuster $11.2bn buy of Wintershall Dea’s oil and gas assets closed at 3pm GMT on 21st December.
A hefty sum at a weird time, but not one born of ‘FOMO’ or panic. Rather, a move expanding Harbour’s global influence and catapulting the company into the league of the UK’s largest oil producers.
Aggressive deals are in Harbour’s DNA; the company was born by the merger of two North Sea oil giants, Chrysaor and Premier Oil in 2021, which brought about a new era of private financing for North Sea oil.
And though the $11bn price tag creates visions of a Brink’s truck, the deal is broken down into multiple moving parts; a $2.5bn cash payment and $4.9bn of debt in the form of existing Wintershall bonds.
Approximately £921m new Harbour shares will also be dispersed to BASF and Letterone at a 60 per cent premium amounting to $4.15bn in value.
As the largest oil and gas producer in the North Sea, the uncomfortable reality of the UK’s decommissioning ambitions there – responsible for around 90 per cent of both Harbour’s oil and gas reserves and production – meant diversification was urgently needed.
Wintershall Dea is owned by European multinational Badische Anilin- und Sodafabrik (BASF), is the world’s largest chemical producer. With €3.4bn (£2.9bn) in operating cash flow in 2022, the company owns oil and gas operations in Norway, Denmark, UK, Netherlands, Germany, Algeria, Libya, Egypt, UAE, Mexico and Argentina.
This doubles Harbour’s presence geographically, adding to its own projects in the UK, Norway, Mexico, Vietnam and Indonesia. Correspondingly, oil production is expected to double from 190,000 barrels a day to 500,000.
The deal makes Harbour simultaneously greener and dirtier – more production will spike emissions but it also diversifies the portfolio, reducing oil projects as a percentage of its total portfolio while upping gas production.
But perhaps most importantly, the deal takes Harbour into waters not ventured by BP and Shell in 2023; a megamerger.
The US oil and gas sector had a bumper M&A year; Exxon Mobil’s $60bn (£47bn) deal for Pioneer Natural Resources and Chevron’s $53bn (£42bn) deal for Hess Corp.
Shell and BP have stayed away; the former is still solving leadership and strategic conundrums while the latter has declared a “boring” approach to buying for the short-medium term future.
For the time being, it seems Harbour will go it alone.
https://www.msn.com/en-gb/money/other/the-11-2bn-acquisition-wintershall-be-better-with-harbour-energy/ar-AA1mBWgq?apiversion=v2&noservercache=1&domshim=1&renderwebcomponents=1&wcseo=1&batchservertelemetry=1&noservertelemetry=1
Wintershall Dea’s drilling ops with Transocean rig cleared for take-off
Wintershall Dea Norge, a subsidiary of Germany’s oil and gas company Wintershall Dea, has secured a green light from the Norwegian offshore safety regulator for the drilling of four wells in the Norwegian Sea, using one of Transocean’s semi-submersible rigs.
The Norwegian Ocean Industry Authority (Havtil) has granted Wintershall Dea consent to use Transocean’s Transocean Norge semi-submersible rig at the Maria field, which covers the drilling of three production wells and one water injector well.
Located on Haltenbanken in the Norwegian Sea, 25 kilometers east of the Kristin field, in a water depth of 300 meters, the Maria field was discovered in 2010 while the plan for development and production (PDO) was approved in 2015. This field, which is developed as a subsea tie-back with two templates, has five producers and two water injectors. The production started in 2017.
The Transocean Norge sixth-generation Moss Maritime CS60 semi-submersible rig was constructed at Jurong Shipyard in Singapore. The rig can accommodate 150 people and its maximum drilling depth is 40,000 ft. While the semi-sub won a 17-well contract in September 2022, a one-well extension with Wintershall Dea was also recently secured for the rig.
The original contract, with day rates between $350,000 and $430,000, was awarded after two oil and gas companies, Wintershall Dea and OMV, entered into an exclusive partnership with Transocean for the use of the rig for the drilling of all firm and additional potential wells in the period 2023 to 2027.
The Transocean Norge rig is the first semi-submersible rig that secured the Abate (Power+) notation, designed to reflect the best industry practices in greenhouse gas abatement for offshore units.
Currently, Harbour Energy is in the process of acquiring Wintershall Dea‘s entire non-Russian oil and gas portfolio along with carbon capture and storage assets in Europe to bring one of the world’s largest and most geographically diverse independent oil and gas companies to life.
This $11.2 billion share and cash deal boosts Harbour’s portfolio with producing and development assets as well as exploration rights in Norway, Argentina, Germany, Mexico, Algeria, Libya, Egypt, and Denmark.
https://www.offshore-energy.biz/wintershall-deas-drilling-ops-with-transocean-rig-cleared-for-take-off/
Carbon cluster plan to provide Aberdeen jobs boost
North Sea heavyweight Harbour Energy is backing plans to store carbon dioxide emissions in depleted oil and gas reservoirs
Carbon capture and storage can play a big part in the effort to tackle Scotland’s emissions and provide a matching boost to the economy as international investors underline their faith in the approach developed in the country, experts reckon.
With firms expected to start pumping carbon offshore for storage in depleted North Sea oil and gas reservoirs in coming months, they think thousands of jobs could be in the pipeline.
https://www.heraldscotland.com/news/24090451.carbon-cluster-plan-provide-aberdeen-jobs-boost/
Overstated UK Wind Power Forecasts Add Millions of Pounds to Energy Bills
Some wind farm operators in the UK have been overestimating forecasts of the power they would generate, leading to millions of British pounds added to consumer energy bills each year—a behavior slammed by a senior UK energy department official.
https://oilprice.com/Latest-Energy-News/World-News/Overstated-UK-Wind-Power-Forecasts-Add-Millions-of-Pounds-to-Energy-Bills.html
UK CCS project enters FEED phase as Technip Energies snatches contract
The Viking Link carbon capture and storage (CCS) project in the UK has entered the front-end engineering design (FEED) phase with the award of the contract to Technip Energies.
Viking CCS, previously known as V Net Zero, is the Humber-based CO2 transportation and storage network led by UK oil and gas producer Harbour Energy with energy giant BP as partner. As per agreement from April 2023, Harbour owns a 60% interest in the project while BP owns a 40% non-operated share.
https://www.offshore-energy.biz/uk-ccs-project-enters-feed-phase-as-technip-energies-snatches-contract/
“Doing the maths HBR is a no brainer buy, don't forget that Wintershall DEA who had FULL access to HBR's Data Room and obviously the Germans did their comprehensive due diligence post which they put a £360p a share price on HBR at a time of even lower O&G prices than today.”
Spot on ancient, HBR will be lot closer to £360 mark by the AGM scheduled on 09 May IMO.
It’s not only the outlook here that’s incredibly attractive, it’s also the nice dividend yield.
Harbour Energy: a transformational opportunity?
FTSE 250 oil and gas producer Harbour Energy (LON:HBR) is now the largest independent oil producer in the North Sea. I reckon it could also become a FTSE 100 member by the end of 2024, if the recently-announced $11.2bn deal to acquire the majority of Wintershall Dea’s production assets goes ahead as planned.
Harbour is also currently one of the most highly-ranked UK shares in the Stockopedia universe, with Super Stock status and a StockRank of 98 at the time of writing:
Recent financial performance has been excellent.
These windfall profits also enabled Harbour to accelerate its planned debt repayments. Net debt fell from $2.8bn at the end of 2021 to less than $800m at the end of June 2023
With a rolling forecast P/E of 6 and a dividend yield of nearly 7%, Harbour’s value metrics appear quite attractive
Private investors who have been in the UK markets for a while are likely to remember Premier Oil. This business was a well-established North Sea operator and also had assets in certain Asian markets.
My impression was always that Premier was a good operator, but its financial position was weak.
The word transformative is sometimes overused in investment commentary, but I don’t think it’s an exaggeration in terms of the potential impact of the Harbour/Wintershall Dea combination.
https://www.stockopedia.com/content/harbour-energy-a-transformational-opportunity-986046/
Brent has now sustainably crossed the USD $80 resistance and nicely trading at $80+ levels here while UK & European Gas prices are both also up/looking bullish at the moment:
https://tradingeconomics.com/commodities
Energy Voice article continuation from previous post:
Credit grade
Harbour produced 186,000 barrels of oil equivalent per day in 2023. This is expected to fall to 150,000-165,000 boepd in 2024. Brook’s explained that planned shutdowns and deferred wells would drive this, while it also expects to complete the sale of its Vietnam asset in the first half.
Stripping out the Wintershall impact, Harbour’s production would be flat in 2025 from 2024.
Adding the deal in, though, will be transformational for Harbour. It will have around 500,000 boepd of production and triple its reserves, increasing its reserve life to eight years.
Meanwhile, opex will fall to $11 per barrel, from $18, and emissions intensity per barrel will also reduce.
It is not just a question of increasing in size, Brooks said. Harbour will emerge with “stronger credit, we expect to reach investment grade credit on completion, which will give us access to lower-cost capital for future growth”.
https://www.energyvoice.com/oilandgas/north-sea/546376/harbour-confident-in-wintershall-dea-deal-despite-sanction-concern/
Harbour confident in Wintershall Dea deal despite sanction concern
Harbour will emerge with “stronger credit, we expect to reach investment grade credit on completion, which will give us access to lower-cost capital for future growth”.
One reason it will take Harbour Energy until the end of the year to close its Wintershall Dea acquisition is the sheer amount of approvals from governments and regulators.
Harbour is buying the international E&P in an $11.2 billion transaction. This will include $4.15bn in the transfer of Harbour equity to Wintershall Dea’s owners.
As a result, BASF will hold 46.5% in Harbour, based on its 73% stake in Wintershall Dea. LetterOne will have 27% in Harbour.
Bringing LetterOne into the company’s shareholder register is likely to prove a particular test. Head of investor relations Elizabeth Brooks was unconcerned about the impact, though. She was speaking at Pareto’s annual E&P conference in London.
The Russian company’s stake will be non-voting, she explained, and it will not receive any seats on the Harbour board. BASF will have two seats on the Harbour board.
“LetterOne is not sanctioned,” Brooks said, “but certain of their minority shareholders are sanctioned. We wanted to structure the deal carefully to ensure LetterOne had no influence over Harbour.”
Mikhail Fridman and Petr Aven, both sanctioned, hold less than 50% in LetterOne. They stepped down from the company’s board in March 2022.
The executive said the company had talked through this structure with its banks and committees and “this is a structure they are comfortable with”.
The process of approvals for the Wintershall Dea falls into “three buckets”, Brooks continued.
Mexico and the European Union will need to clear the deal on anti-trust grounds. In the UK and Germany, there is a requirement for foreign investment approval, while the third bucket covers regular upstream consents.
“We’re confident” in the approval process, she continued. “There is no one approval that is keeping us up at night.”
BASF has set out plans to exit the oil and gas sector – a move reflected in its statement at the time of announcing the deal. The German concern is subject to a six month lock up, but Brooks said Harbour expected it to sell down its position over time.
LetterOne, on the other hand, “wants to stay invested”.
The entry of BASF into Harbour’s ownership opens up the need for UK approval, under the National Security and Investment Act. “That is the opportunity that the UK government can use to look at the LetterOne position. But we don’t see a risk there, we have good engagement with the government.
Article continued via next post…..
Exclusive: Harbour Energy restructures Aberdeen office estate
North Sea oil and gas giant Harbour Energy is consolidating its Aberdeen office footprint across two sites at Prime Four after striking a deal to move into a second building at the business park.
https://www.pressandjournal.co.uk/fp/business/6350733/exclusive-harbour-energy-restructures-aberdeen-office-estate/
Brent has now nicely crossed the USD $80 resistance here and currently trading at $80+ levels while UK, European and Natural Gas prices are all also rallying/looking very bullish at the moment:
https://tradingeconomics.com/commodities
U.S. crude oil inventories decrease by 9.2 million barrels
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 9.2 million barrels from the previous week. At 420.7 million barrels, U.S. crude oil inventories are 5% below the five year average for this time of year, according to the EIA crude oil and petroleum weekly storage data, reporting inventories as of January 19, 2024.
https://www.oilandgas360.com/crude-inventories-1-19/
Brent has crossed the USD $80 resistance here and currently trading at ~$80+ mark while UK and European Gas prices are now also both on the rise:
https://tradingeconomics.com/commodities