Harbour Energy says could be debt free next year

Harbour Energy maintained production guidance on Wednesday and said it may pay down debt and return more cash to shareholders this year if oil prices stayed higher.

In a trading update, the UK-listed operator said it still expected annual production of 195,000-210,000 oil-equivalent barrels a day.

The company also held guidance of $1.5bn - $1.7bn in free cash flow in 2022, based on an oil price of $100 a barrel and a gas price of 200 pence a therm and had the "potential to be net debt free in 2023".

"In the event commodity prices remain elevated and we continue to rapidly de-lever, additional shareholder returns will be considered as we progress through the year within the context of our existing capital allocation framework," the company said.

Oil and gas prices have surged to due the war in Ukraine, which has stoked fears of supply disruption.

Harbour’s first quarter production averaged 215,000 barrels a day, with operating costs of $14.1 a barrel and capital expenditure of $160m over the period. Revenue was $1.5bn.

Net debt was cut to $1.7bn at March 31 from $2.3bn at the end of 2021.

"We have had a strong start to the year. Our increased production reflects the addition of the Premier portfolio, improved operating reliability and increased UK drilling activity," said chief executive Linda Z Cook.