North sea oil and gas maker Harbour Energy sees twelvefold profit increase

The largest producer of oil and gas in the UK’s North Sea saw its profit increase more than twelvefold in the first six months of the year as record gas prices are set to plunge millions of households in the UK into fuel poverty.

Harbour Energy said it had made 1.5 billion dollars (£1.3 billion) in profit before tax in the six months to the end of June.

It was a massive jump for the private equity-backed company which has seen its shares soar by a third in the past year.

In the first six months of 2021 profit was 120 million dollars (£102 million).

It means a big payout for the company’s backers, as Harbour announced it would be returning an extra 100 million dollars to them in share buybacks.

It comes on top of an previously announced 200 million dollar buyback and the same again in dividends, which were announced in March.

The soaring profit came from the boom in energy prices due in part to Russia’s invasion of Ukraine.

While households have been hurting, and face a potentially disastrous winter, Harbour and other oil and gas producers are reaping the benefits.

Harbour said that the average price of the oil that it sells rose from 58 dollars per barrel in the first six months of last year to 82 dollars in the first half of 2022.

Meanwhile the price of a therm of UK-produced natural gas rose from 38 dollars to 69 dollars.

The business said that it expects to owe around 300 million dollars to the Government as part of the windfall tax this year.

“We delivered a strong first half performance, realising value from past acquisitions, increased production efficiency and significant investment in our asset base,” said chief executive Linda Cook.

“Our Tolmount project alone – brought onstream in April – has increased UK domestic natural gas supply by over five per cent.

“At a time when many are struggling with high energy prices, we are increasing investment by circa 30% compared to last year, focusing on doing what we can to deliver reliable, domestic oil and gas from our existing portfolio in a safe and responsible manner.”