Harbour Energy shares dip on falling production and rising costs

Harbour Energy shares slipped on Thursday after the UK-listed oil and gas firm said production would decrease as production costs rise.

Harbour Energy shares were down 6% at the time of writing.

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There was little positive to take away from today’s update as the UK oil and gas producer Harbour Energy said it expects lower production and higher costs in 2024, according to its latest operations update.

The company forecasts production of 150,000-165,000 barrels of oil equivalent per day in 2024, down from 186,000 in 2023. This reflects maintenance shutdowns and project delays.

At the same time, Harbour sees operating costs rising to around $18 per barrel, up from $16 last year. The company attributes this to lower volumes keeping production expenses flat, while total output declines.

The update comes as Harbour moves forward with a transformative $11 billion acquisition of Wintershall DEA’s assets, announced in December, expected to significantly boost the company’s reserves and production.

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But in the near-term, Harbour is facing headwinds from declining output and inflationary pressures driving up unit costs. The company is ramping up drilling to add new capacity, but this will take time to impact volumes.

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