Harbour Energy plc HBRIY announced that it has made quick progress regarding the acquisition of Wintershall Dea’s portfolio of upstream assets. The company has received approval from the regulatory authorities in Mexico and made notable progress on fulfilling other deal conditions. Harbour stated that the progress made would allow it to close the deal by early September, as opposed to its previous guidance that stated that the acquisition would be closed early in the fourth quarter of 2024.
Details of the Acquisition by HBRIY
Harbour announced the acquisition of Wintershall Dea’s exploration and production assets in December 2023. Wintershall Dea’s asset portfolio includes assets in Norway, Germany, Denmark (excluding the Ravn Field), Argentina, Egypt, Libya (excluding Wintershall AG), Algeria and Mexico. The assets also include Wintershall Dea’s carbon capture and storage licenses in Europe. However, its Russian assets are excluded from the deal.
The acquisition, valued at $11.2 billion, also includes $4.9 billion in bonds that were issued by Wintershall Dea. Following the acquisition, the resultant company would emerge as one of the largest independent energy companies in the world. The combined company will also have a diverse geographical presence.
The average production of the combined entity is estimated to be 500,000 barrels of oil equivalent per day (boepd), which is mostly natural gas. It will also hold 1.5 billion boe of proven and probable reserves. Notably, the combined entity is anticipated to have lower greenhouse gas emissions compared to Harbour.
Wintershall Dea’s Assets
In August 2024, the Danish Energy Agency authorized the transfer of interests in four licenses, which were granted to Wintershall Dea, indirectly to Harbour. Wintershall Dea was the operator of Kan oil discovery offshore Mexico. The discovery is scheduled for an appraisal later this year.
The company also held an interest in the Block 30 license offshore Mexico. Wintershall had secured an extension for its license in Block 30 until June 2025. Harbour also has a 30% non-operated working interest in Block 30. Following the acquisition, HBRIY will hold a 70% interest in the block and become its operator.
Wintershall Dea also held interests in other fields such as the Maria Phase 2 development and the Dvalin North field in the Norwegian Sea. The subsea contraction for Maria Phase 2 has been recently concluded, and the startup of production from the field is expected in 2025.
For the Dvalin North field, the company expects gas production to start in 2026. Wintershall Dea was a partner in the Fénix gas development, operated by TotalEnergies.
HBRIY’s Zacks Rank and Key Picks
Currently, HBRIY carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are VAALCO Energy EGY, MPLX LP MPLX and TechnipFMC plc FTI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
VAALCO Energyis an independent energy company involved in upstream business operationswith a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
MPLX LP owns and operates a wide range of midstream assets. The partnership's midstream assets include oil and natural gas gathering systems and transportation pipelines for crude, natural gas and refined petroleum products. MPLX is least exposed to commodity price fluctuations as it generates stable fee-based revenues. Furthermore, it surpasses its industry peers in terms of distribution yield, reflecting its commitment to returning capital to its unitholders.
TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company’s total backlog witnessed a record high of $13.9 million in the second quarter of 2024, indicating a year-over-year increase of 4.51%. This growing backlog ensures strong revenue growth for FTI in the future.
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