Harbour Energy (HBR) said on Tuesday, September 8, 2026, that a sharp increase in free cash flow is allowing it to maintain production near 500,000 barrels a day without seeking a major acquisition, while maintaining a 45%-75% free-cash-flow payout policy and outlining growth projects in Mexico, Argentina and the U.S. Gulf of Mexico. The company said the cash flow increase is central to its strategy.
The comments came at the Barclays 40th Annual Energy-Power Conference, where Chief Executive Linda Cook outlined the company's guidance, portfolio and capital allocation plans. Harbour's acquisition strategy began nearly 10 years ago and has included the 2021 Premier Oil transaction and an $11 billion Wintershall Dea deal completed about three years before the conference. Its LLOG acquisition, announced in December and completed in February 2024, added about 35,000 barrels a day of U.S. Gulf of Mexico production and represented about 7% of the portfolio as of February 2024.
Harbour raised full-year production guidance to 490,000 to 500,000 barrels a day after first-half 2024 output of 509,000 barrels a day. Management said it aims to keep output around 500,000 barrels a day for several years using the existing portfolio. The company's production mix is about 40% oil, 40% European gas and 20% domestic gas, with core geographies in Norway, the U.K., the U.S., Mexico and Argentina.
In the U.S., Harbour deployed a second deepwater rig and scheduled the King's Road exploration well to spud in the weeks following the conference. In Mexico, the company holds a 70% interest in Khan and a 27% interest in Zama, described as the largest undeveloped discovery in Mexico. The two projects represent roughly 350 million barrels of Harbour's share of reserves. Both are moving into front-end engineering and design, with final investment decisions expected by the end of 2025.
In Argentina, Harbour produces about 70,000 barrels a day from conventional offshore Tierra del Fuego assets. Oil fairway drilling in Vaca Muerta is expected to begin in early 2025, while gas fairway work is already under way. The company also holds a 15% stake in the Southern Energy LNG project, which uses two leased Golar floating LNG vessels with a capacity of 6 million tons per annum under Argentina's RIGI investment incentive regime.
Harbour said U.K. costs fell from about $20 per barrel three to four years ago to $18 per barrel the previous year. Cook said she does not expect major changes to the U.K. fiscal framework before 2030.
The company's free cash flow guidance has risen from an initial $600 million for the year to $1.8 billion at midyear, with a forward-curve estimate of about $2.3 billion or higher. Net debt was $5.4 billion at midyear. Harbour said it returns 45% to 75% of annual free cash flow to shareholders and uses the remainder for debt reduction. Under a $2.3 billion free cash flow scenario and a payout ratio of about 50%, roughly $1.1 billion to $1.2 billion would be returned to shareholders, with a similar amount applied to debt reduction. The company has a minimum dividend commitment of $300 million and an approved share buyback program of $250 million.
Harbour's shares were shown trading at $10.79, down 28% year to date, while a separate chart snippet cited a price point of about 258.80 pounds, up 0.86%. European gas was trading at about $130 per barrel equivalent, or $25 to $26 per million British thermal units.
Cook described the company's early strategy as contrarian, saying the goal was to build scale in at least one basin and then buy conventional producing assets outside the U.S. when they were out of favor. She said Harbour does not need to pursue an acquisition now because of the strength of the existing portfolio, and added that the company is keeping its Argentina investments at an appropriate scale.
BASF's stake in Harbour fell from 47% at the start of the year to 24% through three separate transactions.
