We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Harbour Energy to Enter the U.S. Gulf With $3.2B LLOG Acquisition
Read MoreHide Full Article
Key Takeaways
Harbour Energy agreed to acquire privately held LLOG for $3.2B, targeting a Q1 2026 close.
The deal adds oil-weighted assets with 271 mmboe of 2P reserves, lifting total reserves by 22% and margins.
HBRIY expects the deal to boost free cash flow per share from 2027 and support future drilling opportunities.
Harbour Energy plc (HBRIY - Free Report) , a U.K.-based oil and gas company, has inked an agreement for the acquisition of a privately held oil and gas company, LLOG Exploration Company LLC. The deal, which is expected to close by the end of the first quarter of 2026, involves a total consideration of $3.2 billion. Of this amount, $2.7 billion comprises cash, while the remaining $0.5 billion is in voting ordinary shares. After the completion of the deal, LLOC Holdings LLC will have approximately 11% of HBRIY’s listed voting ordinary shares. Harbour’s current shareholders will hold the remaining 89% of the shares.
High-Quality, Oil-Weighted Deepwater Asset Base
The acquisition is set to build Harbour Energy’s presence in the Gulf of America, one of the most prolific offshore basins in the world. This also adds high-quality, oil-weighted offshore assets to its portfolio, supported by fully developed infrastructure in place. The key assets in the deal include the Who Dat in Mississippi Canyon, and Buckskin and Leon-Castile fields in Keathley Canyon. Furthermore, owing to LLOG’s strong presence in the prolific Lower Tertiary Wilcox play, one of the most prolific deepwater plays in the U.S. Gulf, the company expects its production to increase to approximately double its current level.
Impact on Reserves, Production and Margins
Harbour Energy stated that the acquired assets are characterized by low breakeven costs and contain proved and probable (2P) reserves with an estimated reserve life of around 22 years. The acquisition enhances HBRIY’s current portfolio and solidifies its long-term production outlook. Notably, it adds to the company’s overall production of around 500 thousand barrels of oil equivalent per day (kboepd) through 2030. The assets contribute 271 million barrels of oil equivalent (mmboe) of 2P reserves, raising Harbour’s total 2P reserves by 22% while also prolonging reserves life from seven to eight years. The company noted that the acquisition also improves its margins and reduces its effective tax rate.
Long-Term Growth Opportunities
The acquisition also offers meaningful upside potential to Harbour Energy, mainly due to the former’s extensive drilling and lease inventory in the prolific basin, which provides future growth opportunities. Notably, the company has gained a deep inventory of high-return drilling opportunities supported by the existing infrastructure, which has enabled it to identify the potential to drill eight wells through 2026 and 2027.
The company expects the transaction to be accretive to its free cash flow per share starting in 2027. HBRIY expects the deal to generate significant free cash flows, which can support shareholder returns and contribute toward deleveraging its balance sheet. Overall, the transaction is expected to supplement free cash flow generation, extend the reserve life of its assets and enhance scale.
Harbour Energy stated that it has wanted to establish a presence in the U.S. Gulf for a long time, and this acquisition enables it to do that. LLOG Exploration’s high-quality deepwater assets and well-established infrastructure in the region should position Harbour as a leading player in the basin. Additionally, the supportive fiscal and regulatory environment is expected to aid its growth in the region. The company has mentioned that upon closing the transaction, LLOG will become the new Gulf of America business unit of Harbour Energy. HBRIY will retain the LLOG name to capitalize on its long operational history in the region.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.
Subsea7 helps build underwater oil and gas fields. It is a leading player in the global offshore energy industry, providing engineering, construction and related services at offshore oil and gas fields. The long-term outlook for energy demand remains positive, and Subsea7’s focus on cost-efficient deepwater projects strengthens the position of its subsea business.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Harbour Energy to Enter the U.S. Gulf With $3.2B LLOG Acquisition
Key Takeaways
Harbour Energy plc (HBRIY - Free Report) , a U.K.-based oil and gas company, has inked an agreement for the acquisition of a privately held oil and gas company, LLOG Exploration Company LLC. The deal, which is expected to close by the end of the first quarter of 2026, involves a total consideration of $3.2 billion. Of this amount, $2.7 billion comprises cash, while the remaining $0.5 billion is in voting ordinary shares. After the completion of the deal, LLOC Holdings LLC will have approximately 11% of HBRIY’s listed voting ordinary shares. Harbour’s current shareholders will hold the remaining 89% of the shares.
High-Quality, Oil-Weighted Deepwater Asset Base
The acquisition is set to build Harbour Energy’s presence in the Gulf of America, one of the most prolific offshore basins in the world. This also adds high-quality, oil-weighted offshore assets to its portfolio, supported by fully developed infrastructure in place. The key assets in the deal include the Who Dat in Mississippi Canyon, and Buckskin and Leon-Castile fields in Keathley Canyon. Furthermore, owing to LLOG’s strong presence in the prolific Lower Tertiary Wilcox play, one of the most prolific deepwater plays in the U.S. Gulf, the company expects its production to increase to approximately double its current level.
Impact on Reserves, Production and Margins
Harbour Energy stated that the acquired assets are characterized by low breakeven costs and contain proved and probable (2P) reserves with an estimated reserve life of around 22 years. The acquisition enhances HBRIY’s current portfolio and solidifies its long-term production outlook. Notably, it adds to the company’s overall production of around 500 thousand barrels of oil equivalent per day (kboepd) through 2030. The assets contribute 271 million barrels of oil equivalent (mmboe) of 2P reserves, raising Harbour’s total 2P reserves by 22% while also prolonging reserves life from seven to eight years. The company noted that the acquisition also improves its margins and reduces its effective tax rate.
Long-Term Growth Opportunities
The acquisition also offers meaningful upside potential to Harbour Energy, mainly due to the former’s extensive drilling and lease inventory in the prolific basin, which provides future growth opportunities. Notably, the company has gained a deep inventory of high-return drilling opportunities supported by the existing infrastructure, which has enabled it to identify the potential to drill eight wells through 2026 and 2027.
The company expects the transaction to be accretive to its free cash flow per share starting in 2027. HBRIY expects the deal to generate significant free cash flows, which can support shareholder returns and contribute toward deleveraging its balance sheet. Overall, the transaction is expected to supplement free cash flow generation, extend the reserve life of its assets and enhance scale.
Harbour Energy stated that it has wanted to establish a presence in the U.S. Gulf for a long time, and this acquisition enables it to do that. LLOG Exploration’s high-quality deepwater assets and well-established infrastructure in the region should position Harbour as a leading player in the basin. Additionally, the supportive fiscal and regulatory environment is expected to aid its growth in the region. The company has mentioned that upon closing the transaction, LLOG will become the new Gulf of America business unit of Harbour Energy. HBRIY will retain the LLOG name to capitalize on its long operational history in the region.
HBRIY’s Zacks Rank and Key Picks
HBRIY currently has a Zacks Rank #4 (Sell).
Some top-ranked stocks from the energy sector are Oceaneering International (OII - Free Report) , Subsea7 S.A. (SUBCY - Free Report) and FuelCell Energy (FCEL - Free Report) . While Oceaneering currently sports a Zacks Rank #1 (Strong Buy), Subsea7 and FuelCell carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.
Subsea7 helps build underwater oil and gas fields. It is a leading player in the global offshore energy industry, providing engineering, construction and related services at offshore oil and gas fields. The long-term outlook for energy demand remains positive, and Subsea7’s focus on cost-efficient deepwater projects strengthens the position of its subsea business.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.