Harbour Energy, the British North Sea's biggest oil and gas producer, reported on Thursday free cash flow of $678 million for 2021 in its first full-year results after its merger with Premier Oil, up from a pro-forma $562 million in 2020.
It forecast that, at an oil price of $100 a barrel and a gas price of 200 pence per therm, free cashflow could reach between $1.5 billion and $1.7 billion after tax and paying its $200 million annual dividend.
Harbour expects to produce between 195,000 to 210,000 barrels of oil equivalent per day (boe/d) this year, compared with 175,000 boe/d in 2021.
Harbour, like most of its peers, hedges some of its sales to shield against price volatility, which can mean producers miss out on some peaks of price rallies, such as the ones the oil and gas market has seen in recent months.
Benchmark oil prices LCOc1 currently trade around $100 a barrel.
Out of its 2022 and 2023 oil output, it hedged about 26 million barrels at an average price of $61.05-$61.15 a barrel. Out of its gas production, it hedged 25.37 million boe in 2022 at an average price of 50.75 p/therm and 23 million boe in 2023 at an average 40.86 p/therm.
Harbour said it planned to ask shareholders to grant it the "general authority" to buy back up to 15% of its shares.
(Reuters - Reporting by Shadia Nasralla/Editing by David Goodman)