Home Money Harbour Energy sees profits wiped out AGAIN by Britain’s windfall tax

Harbour Energy sees profits wiped out AGAIN by Britain’s windfall tax

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Drained: Harbor Energy profits disappear again
  • Harbor’s pretax profit of $597 million shrinks to just $32 million after tax
  • The chancellor confirmed on Wednesday that the EPL will be extended until March 2029



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FTSE 250 oil company Harbor Energy has seen the vast majority of its profits wiped out by Britain’s Energy Profits Tax for the second year running.

Britain’s biggest North Sea oil producer posted a pre-tax profit of $597 million for the 12 months to March 7, falling to just $32 million after tax, with $525 million paid to tax on energy windfalls, an effective tax rate of 95 percent. .

The EPL was introduced in 2022 in response to booming oil and gas profitability as Britons struggled to pay their bills.

It resulted in a staggering $1.5 billion bill for Harbor Energy, dragging its pretax profits from $2.5 billion to just $8 million.

Drained: Harbor Energy profits disappear again

Drained: Harbor Energy profits disappear again

Harbor Energy told investors it was “currently assessing the potential impact” after Chancellor Jeremy Hunt confirmed in his Spring Budget on Wednesday that the Energy Profits Levy would be extended for a further 12 months until the end of March 2029.

The group previously cut British jobs and reduced spending in the North Sea in an effort to diversify its overseas exposure, partly in response to the EPL.

It posted revenue of $3.7 billion last year, down from $5.4 billion in 2022, reflecting lower oil volumes and prices. Oil prices approached $120 a barrel in 2022, but are now trading below $80 a barrel despite recent uncertainty caused by attacks on ships in the Red Sea.

Harbor Energy agreed in December to acquire Wintershall Dea’s non-Russian oil and gas assets in an $11.2 billion deal, making it one of the world’s largest independent producers.

Boss Linda Cook said: “We remain focused on successfully completing the acquisition of Wintershall Dea and on the continued, safe and efficient management of our existing portfolio.”

Mark Crouch, an analyst at investment platform eToro, said the acquisition of Wintershall Dea “could transform the business by more than doubling the oil and gas company’s daily production and diversifying its operations outside the UK.”

He added: “With global oil demand set to reach a new all-time high in 2023, investors will have high hopes for the Wintershall acquisition, which will be completed in the fourth quarter of this year, and the potential it offers.

‘Looking back to Harbor’s inception and its acquisition of Premier Oil in 2021, Harbor Energy has since repaid 90 percent of the resulting $2.7 billion debt and introduced one of the most attractive dividend yields in the sector, which have increased again by 9 percent after this morning’s update.

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