MARKET REPORT: Harbour Energy booms as commodity prices rocket

Bosses at the North Sea’s largest oil and gas producer have seen the value of their shares soar by nearly £30million this year.

Harbour Energy rose another 10 per cent, or 43.1p, to 473.6p yesterday after it reported profits of nearly £1.3billion for the first half of 2022. 

That was more than 12 times the £101million it generated in the same period a year ago as the company cashed in on soaring energy prices.

The latest rally took gains in the share price to 33 per cent this year.

That has added £10million to the value of the 0.9 per cent stake held by chief executive Linda Cook. Her holding is now worth nearly £40million.

The 1.7 per cent stake held by chairman R Blair Thomas has risen by £18million to £71million.

Harbour was formed in 2014 but in 2021 completed a reverse takeover of rival Premier Oil to cement its status as the North Sea’s biggest producer.

As a result of the bumper half-year profits, Harbour said it would add an additional £85million to a share buyback programme originally announced in June, taking the total to £254million. 

The strong results came as the firm reported a 40 per cent increase in production during the period, adding that its Tolmount gas project in the southern North Sea had increased the UK’s domestic gas supply by 5 per cent when it was brought online in April.

Analysts at broker Jefferies hailed the ‘excellent’ results and predicted the group’s multi-million-pound share buyback ‘won’t be the last’.

Stock Watch – Hunting 

Hunting shares soared after it secured more orders and swung back into profit.

The energy services firm said its sales order book – now more than £338m – has almost doubled since December.

This came following contract wins for an offshore project in China and in the Gulf of Mexico. Meanwhile, Hunting reported a profit of £17.4million for the six months to the end of June, having made a loss of £3million a year earlier.

Shares surged 20.4 per cent, or 46p, to 272p.

Harbour predicted it would produce 200,000 to 210,000 barrels of oil per day across the whole of 2022, up from previous guidance of 195,000 to 210,000 barrels.

It also expected to pay £423million in taxes for 2022, around £254million of which will be due to the 25 per cent windfall tax on oil and gas profits announced earlier this year by then-chancellor Rishi Sunak.

Michael Hewson, of trading firm CMC Markets UK, said: ‘Against that backdrop it wouldn’t surprise to see the company target future investment efforts towards its smaller interests in order to diversify its revenue streams, with the directors of the company saying that investment in the UK now comes with elevated fiscal risks.’

Cook said the firm would boost investment in its projects by 30 per cent compared to last year in order to deliver a ‘reliable, domestic oil and gas’ supply for the UK at a time when many were ‘struggling with high energy prices’.

The FTSE 100 gained 0.11 per cent, or 8.23 points, to 7479.74 but the FTSE 250 inched down 0.25 per cent, or 47.36 points, to 19,257.87.

Mining stocks helped to lift London’s top index as Fresnillo added 0.6 per cent, or 4.4p, to 732p, Antofagasta climbed 1.7 per cent, or 20p, to 1167p and Glencore was up 1.5 per cent, or 7.3p, to 505p. 

Fellow blue-chip miners Anglo American rose 1.4 per cent, or 40.5p, to 2919.5p and Rio Tinto rose 0.4 per cent, or 19.5p, to 4951p. 

Shares in AstraZeneca inched up 0.6 per cent, or 72p, to 11422p after three of its drugs were approved by Japanese regulators.

The pharmaceutical giant was given the green light for its breast cancer treatment Lynparza and Ultomiris which treats myasthenia gravis, a rare disorder that stops muscles from working properly. 

Tagrisso, a tablet used to treat lung cancer – the leading cause of cancer deaths in Japan – was also approved.

Shore Capital analysts said the approval reiterates AstraZeneca’s global footprint as well as its strategy to ‘hit cancer early and hit cancer smartly’.

Rival GSK, meanwhile, slipped 0.6 per cent, or 8.6p, to 1390.4p.

Cineworld tumbled 31.4 per cent, or 0.88p, to 1.92p after its second-largest investor offloaded shares.

In a further blow for the world’s second-largest cinema chain, Beijing-based Jangho Group lowered its stake to 11.6 per cent from 13.8 per cent.