Harbour Energy announced that the company has completed the acquisition of the Wintershall Dea asset portfolio, comprising substantially all of Wintershall Dea AG’s upstream assets. The Acquisition has an effective date of 30 June 2023.
In line with prior guidance, Harbour financed the Acquisition through the issuance of equity with an agreed value of $4.15 billion, the transfer of c.$4.9 billion of euro denominated Wintershall Dea bonds comprising investment grade and hybrid bonds, and cash consideration of $2.15 billion.
Of the $2.15 billion cash consideration, c.$0.4 billion was satisfied by agreed adjustments under the Business Combination Agreement. This includes a pre-completion dividend paid to Wintershall DEA AG funded by cash flow from the Target Portfolio between the effective date and Completion. The remaining c.$1.8 billion cash consideration was funded from Harbour’s $1.5 billion bridge facility and c.$0.3 billion of Harbour’s existing cash. The bridge facility will be repaid in part using some of the acquired $0.8 billion of cash balances within the Target Portfolio.
As a result, Harbour’s estimated net debt on Completion is c.$4.5 billion. This reflects:
- $3.8 billion of bonds, comprising $3.3 billion Wintershall Dea investment grade bonds transferred to Harbour and Harbour’s existing $0.5 billion bond. (Note: The c.$1.7 billion of euro denominated hybrid bonds transferred from Wintershall Dea have been reclassified as equity following Harbour Energy plc becoming the guarantor of the notes at Completion.);
- c.$1.8 billion of drawings on debt facilities, comprising Harbour’s fully drawn $1.5 billion bridge facility and c.$0.3 billion of drawn RCF; and
- $1.1 billion of cash, including $0.8 billion of acquired cash balances from the Target Portfolio and $0.3 billion of cash within Harbour at Completion.
Following Completion, and because of the significant improvement to Harbour’s credit quality, Harbour expects its existing Credit Watch positive outlook with Fitch and S&P to be resolved. Harbour expects to be rated Investment Grade in due course.
Harbour today updates its guidance for 2024 to include the impacts of the Acquisition. The updated guidance reflects 12 months contribution from Harbour’s legacy assets and four months contribution from the Target Portfolio. The proforma equivalent metrics reflecting 12 months contribution from Harbour’s legacy assets and the Target Portfolio are included as a reference.
- Production of 250-265 kboepd; proforma 470-485 kboepd
- Unit operating costs of $16-$17/boe; proforma $13-14/boe
- Total capital expenditure, including production and development, exploration and appraisal and decommissioning costs, of c.$1.7 billion; proforma c.$2.7 billion
The above guidance and equivalent proforma metrics are consistent with that provided independently by Harbour and Wintershall Dea on 8 August 2024.
Regarding hedging, for the second half of 2024, Harbour Energy has hedged 88 kboepd and 38 kboepd of its European gas and oil production at $11/mscf (c.90p/therm) and $78/bbl, respectively. For 2025, hedges are in place covering 79 kboepd and 36 kboepd of its European gas and oil production at $13/mscf (c.105p/therm) and $77/bbl, respectively. Harbour’s full hedging schedule, including for 2026 and 2027, is set out in the appendix.
