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Harbour Energy PLC on Monday said the $3.2 billion acquisition of LLOG Exploration Co LLC will materially improve cash flow supporting ‘competitive shareholder distributions’. The oil and gas producer with operations across Europe, Latin America, North Africa and Southeast Asia said the deal adds conventional offshore oil assets, increases production, extends reserves life and improves margins. Harbour Energy said the consideration will be settled $2.7 billion in cash and $500 million in shares to be issued to the seller, LLOG Holdings LLC The cash portion will be funded through an underwritten $1 billion bridge facility, a $1 billion term loan and existing sources of liquidity. The share issue will be priced at 215 pence per share. Harbour Energy was 7.1% lower at 191.80p in London on Monday morning. The FTSE 250 listing has a market capitalisation of £2.71 billion. With the shares it will receive, LLOG Holdings will have an 11% stake in Harbour Energy. The acquisition establishes a top tier position in deep water Gulf of Mexico and adds another core business unit alongside Norway, the UK, Argentina and Mexico, Habour Energy said. ‘The transaction positions us as a leading player in a region with well-established infrastructure, a supportive fiscal and regulatory environment and opportunities for additional growth,’ said Chief Executive Linda Cook. Harbour Energy said the deal adds 2P reserves of 271 million barrels of oil equivalent, increasing group 2P reserves by 22%, and enhances Harbour’s 2P reserves life from 7 years to 8 years. The deal is accretive to margins and lowers Harbour’s effective tax rate, the company added. In addition, the agreement is free cash flow per share accretive from 2027 with the ‘material and increasing free cash flow’ supporting ‘competitive shareholder distributions and deleveraging,’ Harbour said. Reflecting this ambition, Harbour said it intends to move distribution policy to a payout ratio approach in 2026, incorporating a base dividend and share buybacks, to align with international and US oil and gas peers. Completion of the acquisition is expected to occur in late first quarter 2026. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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