 Investors craving energy plays in 2025 may wish to consider this 8%-yielding UK stock
Harbour Energy is a UK stock with a diversified portfolio and yield level that may appeal to investors seeking traditional energy plays this year.
Traditional energy companies have been buoyed by rising prices and Donald Trump’s pro-oil US presidency at the start of the year. In this market climate, high-yield UK stock Harbour Energy (LSE: HBR) might be an option to consider for those eyeing returns as well as price appreciation.
Admittedly, the field of energy companies wooing investors is very competitive these days. It doesn’t help that Harbour Energy grabbed headlines due to its North Sea exposure. Operators, like the company, were clobbered last summer with heavy taxation by the UK’s Labour government for North Sea production.
But there’s more to the company and its performance.
Not just the North Sea
At the start of 2025, Harbour Energy remains the largest London-listed independent oil company. It has a geographically diverse portfolio comprising assets in Argentina, Mexico, North Africa and Southeast Asia. These sit alongside assets in Germany, and British and Norwegian North Sea holdings.
The company’s current global production level is around 475,000 barrels of oil equivalent per day, enabling it to offer income-chasing investors a near 8% yield.
A well-respected board and CEO Linda Cook have overseen its expansion over the last four years via both organic and acquisitive growth. Their latest strategic play was the acquisition of Wintershall Dea last year for $11.2bn.
Operational discipline
In the six months to January, marked by declining oil prices, Harbour Energy saw its share price fall by around 5%. But over the same period, this compares favourably with its peers along with UK majors Shell and BP, with both posting declines of 3% and 6% respectively.
The first three weeks of January also saw Harbour Energy’s share price rise by 11%, bringing it close to the 300p mark. It hit a 52-week high of 333p in May before oil price volatility and changes to North Sea taxation knocked investor confidence.
Harbour Energy has since been trying to regain it. The company’s net debt has decreased significantly in recent years. It expects to have a net cash position by the end of 2025. Unsurprisingly, dividends have slowly but steadily increased since March 2022.
Market rumours are also rife about Harbour Energy moving its primary listing to the US, giving the energy stock further positive vibes. The company has dismissed the rumours. Instead, it is pursuing an investment-grade credit rating (i.e. bond or other form of debt vehicle / security with a low default risk), through financial and operational discipline.
What’s not to like?
There is a lot to like about Harbour Energy, but caution is still merited. As trading in 2024 demonstrated, direction of oil and gas prices will impact the company’s share price no matter how operationally disciplined it is.
A US listing, should it happen, is not always a one-way ticket to a higher valuation, as Diversified Energy Company recently found out. Some may also find Harbour Energy’s risk versus reward profile to be too timid or conservative, with other small-to-mid sized oil and gas stocks offering greater potential for price appreciation.
On balance, this high-yield energy midcap UK stock with a low risk profile strikes the right note for me, and I will be adding more of it to my portfolio. |
Seeking Alpha - Jan. 16, 2025
Harbour Energy Turned Into A 500,000 Boe/Day Producer Overnight |
Trump Team Readies Oil Sanctions Plan for Russia Deal, Iran Squeeze
Bloomberg) -- Advisers to President-elect Donald Trump are crafting a wide-ranging sanctions strategy to facilitate a Russia-Ukraine diplomatic accord in the coming months while at the same time squeezing Iran and Venezuela, people familiar with the matter said.
The outgoing Biden administration on Friday imposed the most disruptive sanctions on Russia’s oil trade by any Western power to date. The move created an open question about how Trump views the measures, given his commitment to quickly ending the war in Ukraine. |
Strong Production and Financial Outlook Justifies Buy Rating for Harbour Energy
Analyst Chris Wheaton from Stifel Nicolaus reiterated a Buy rating on Harbour Energy (HBR – Research Report) and increased the price target to p483.00 from p475.00.
Chris Wheaton has given his Buy rating due to a combination of factors that demonstrate Harbour Energy’s strong financial and operational position. The company has upgraded its production guidance for the full year as a result of successful new wells and the Fenix gas field in Argentina performing ahead of schedule. This increase in production is expected to bolster the company’s output forecast for the upcoming year.
Furthermore, Harbour Energy is projected to generate significant free cash flow, with a proforma estimate of $1.1 billion for the current year and an expectation of maintaining an average of $1 billion annually until 2030. The company’s net debt is also slightly lower than anticipated, suggesting robust financial management. Additionally, the risks associated with potential UK windfall taxes appear to have stabilized, providing a more favorable fiscal environment for the company. These factors collectively support the Buy rating and the target price set by the analyst. |
Downward trend in place since May 2024 broken with current strong momentum suggesting there is more to come. Should continue rise until trading update next Thursday. If news is positive, it could test £3.20/£3.30 resistance levels. |
Yahoo Finance - Wed 15 January 2025 |
It's clear this company has no place being quoted or traded in London. WTF doesn't she simply make a decision to move to Europe or US? |
Thanks for the correction.Investegate had it on their weekly email 'RNS to keep an eye out for in the week ahead...' as the 16th. Clearly they have that wrong. |
HBR’s next “Trading & Operations Update” here is actually on 23 January, and hopefully now with nicely higher/rising O&G prices along with our excellent assets, it’s a very positive one, fingers crossed. |
Trading update 16th so hopefully signs of good news. |
Nice breakout. Will it continue? |
https://www.fool.co.uk/2025/01/10/this-uk-dividend-share-is-currently-yielding-8-1/ |
A whole £3 eh ? What happened to the 500p- 700p incoming all the experts on here been sayig. Been trash since PMO. Might make money from this dog if you are a teenager and live to 80. Proper flea bitten dog. |
Agreed, strong momentum. 2.72 is the resistance. Tried 3 times since mid Nov to break through. Another strong attempt today. Once it does I expect we will trade closer to 3 pounds. Hopefully next week if momentum carries on which would set us up nicely for the trading update the following week. |
With Brent cash just shy of $80 and Nat Gas flying and all the good work done and distancing from the UK tax grab am not too sure if current valuation is reflecting all of this . Not to mention momentum ( chart wise ) is heating up . Once over 200ma I will feel even more bullish |
Post from lse bb with interesting points:
Mancunian77
Posted in: HBR
Posts: 80
Price: 266.90
No Opinion
RE: What a lovely flag. 292p incoming?
9 Jan 2025 08:34
HBR share price should already be much higher than £3+ here while now trend for O&G prices is clearly bullish which along with a rapidly weakening £GBP (leading to higher $USD denominated dividends) are all excellent news for HBR! |
Nat Gas flying boosted further by Russian cuts . Surprised this isn't already well passed 300 |
Least we forget our Kan field which we own 70%.
It is located in 50 metres of water, was drilled to a total measured depth of 3,317 metres and encountered more than 170 metres of net pay. The well was subsequently side tracked up-dip and c. 250 metres of core was recovered. Estimate say it may hold between 200-300 million barrels of oil .
We started drilling an appraisal well in August and were still appraising in aNovember so should be good news plus we have started recruiting for this field as well. |
So some very positive new from the Mexican government regarding Pemex. They are in the market to do deals and in a rush to do them.
So perhaps the picture is clearing a bit with our hero Slim. Heres how the story goes.
Slim spent over 1$ billion dollars in the Mexican oil industry last year. He owns 24% of Talos who are partners with us in Mexico. There was a poison pen strategy to stop Slim taking over the company but that ceased in December 2024 after agreement with Talos for him not to hold over 25% of the Talos. Its very clear now that we won’t be buying Talos.
Part of the above deal was for Slim to buy more of Talos Mexico (who are our partner in our Zama field) and he now owns 80$ of Talos Mexico.
So, Slim owns 80% of Talos Mexico which owns 17.4% of Zama. He also owns 5% of Harbour Energy who own 32% of Zama. He directly owns roughly about 17% of Zama.
Keep up at the back……….
So we have Pemex who have a greatly reduced budget to invest this year, Slim who has lots of money to invest and a Mexican government very keen to get crackin with a FEED which Im pretty confident is already sorted.
Then you have Harbour Energy who are very busy recruiting in Mexico and here are just a few of their current vacancies…R30;
Senior Reservoir engineer, Pipeline Engineer, Project Integration Geomodeller, Reservoir Engineer, Senior Production Engineer, Sr. Process & Flow Assurance Engineer, Sr. Reservoir Engineer, Supply Chain Manager, Permitting Specialist Controller, Cost Controller, Human Resources Specialist.
Any thoughts ? |
Yeah but he's calling to the Labour government who are more incompetent than the Conservatives. Nevertheless, it does look like we have broken out to the blue.
I said a while back that there is corporate action in play here (lots of small things I've noticed 2+2=5 probably). If an announcement is made, it'll be in the weeks following the next FY TS. |
Trump effect :-) |
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