How has Harbour Energy fared since Premier, Chrysaor merger?

• Harbour Energy PLC (LON: HBR) share price sank to a low of £360.50 last week
• Energy stocks have been falling, amid increased oil price volatility as a result of failed OPEC+ production talks
• Other oil stocks, particularly Tullow Oil and BP, also suffered big drops
• Harbour Energy stocks are down by nearly 12% since they began to trade on the London Stock Exchange on 01 April 2021
• The group was formed after Chrysaor and Premier Oil had merged
• Interested to trade Harbour Energy shares for just a fraction of the cost? Open an account with us today to explore your options.

Harbour Energy share price: Why is it down?

Harbour Energy shares plunged as much as 10% last week, as oil price volatility returned to the markets after the latest round of OPEC+ supply talks collapsed.

Discussions for increased oil output from August stalled last Monday (05 July 2021), following a disagreement between Saudi Arabia and the United Arab Emirates over a proposed eight-month extension to output curbs.

The meeting was then cancelled with no new date set.

Oil prices fell heavily at the turn of events, before fear over restricted supply lifted prices in the latter part of the week.

Despite the massive daily volatility, September WTI crude oil eventually closed at US$73.81, down US$0.55 or -0.74%, while September Brent crude oil concluded at US$75.55, down US$0.62 or -0.82%.

Amid the volatility, Harbour Energy fell to a week-low of £360.50. Shares are down another 4.4% on Monday (12 July 2021).

Other oil stocks also suffered massive drops. Tullow Oil lost over 13% of its market cap, BP shaved off 6.7% of its share price, while Royal Dutch Shell managed a smaller but still significant 4% decline.

How has HBR performed since launching on the LSE?

Upon closer examination, Harbour Energy’s woes appear to have started much earlier.

The UK oil and gas company’s stocks have declined 11.5% since being admitted to trading on the London Stock Exchange’s main market on 01 April 2021, following the completion of an all-share merger of Chrysaor and Premier Oil.

And in the last one month alone, shares are down by over 14%.

The stock’s performance has not lived up to the initial hype that had surrounded the merger and launch of the ‘largest UK listed independent oil and gas company’.

On the first day of trading, HBR had issued a press release, stating that it ‘has a cash-generative diversified UK business with a significant operated position and competitive operating costs, providing resilience to commodity price volatility’.

In addition, the group claimed to possess a strong balance sheet and the financial flexibility to fund both further growth and shareholder returns, including via a sustainable dividend programme in the near future.

It also espoused a ‘broad set of international growth opportunities, including an attractive development and exploration portfolio and a management team with a track record of value creation through disciplined M&A transactions’.

Finally, Harbour said it was committed to producing oil and gas responsibly to help meet the world’s energy needs. ‘The group has a lower carbon intensity than the average UK oil and gas producer with a commitment to achieve Net Zero greenhouse gas emissions by 2035,’ it added.

Linda Z Cook, CEO of Harbour Energy, had also commented, saying that Harbour ‘offers a unique opportunity for investors’, as it brings together two complementary portfolios with a material North Sea foundation and an attractive global footprint.

Has Harbour Energy’s 2021 guidance held up?

In the same press release, Harbour Energy had forecasted a proforma production of 200-215 kboepd and reported production of 185-200 kboepd for 2021.

Then, in a trading and operations update provided on 23 June 2021, the group said that 2021 proforma/ reported production is ‘now expected to be at the low end of 200-215 kboepd / 185-200 kboepd guidance’.

‘Harbour will review its full year forecast once the planned major shutdowns have concluded and Tolmount has commenced production around the end of July,’ it added in the update.

Meanwhile, for the five months to 31 May 2021, the group reported a proforma/ reported production of 197 kboepd/ 162 kboepd, which reflected ‘planned maintenance and inspection programmes deferred from 2020 to 2021 and unplanned outages during the period’ in its non-operated portfolio during Q2.

This included a three week shut down at the Elgin Franklin Area in April due to unexpected maintenance on the Unity platform.

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