Harbour Energy Share Price Meltdown Continues: Buy the Dip?

Harbour Energy share price plunged to the lowest level since July 26 of this year. It has retreated by over 36% from its highest level this year, giving it a market cap of over £3.56 billion. The decline happened after the company published the latest earnings last week.

HBR stock retreats

Harbour Energy is a leading oil and gas company in the UK. It is the biggest independent oil and gas producer in the North Sea. Unlike companies like Shell and BP, the company focuses on upstream production. In a statement, the firm said that production in the year to the end of September rose by 27% and averaged 207 kboepd. It expects that production for the year will be in the upper half of its 200-210 kboepd.

Its revenue rose to $4.1 billion while its total capex was $700 million even as hedging hurt its income. The firm received $80 per barrel, lower than the market price of $105. It lowered its full-year guidance to $1 billion from the previous $1.2 billion. Further, the company now forecasts that its free cash flow will be between $2-$2.2 billion. It has minimal debt and has already returned $500 million to shareholders.

Harbour Energy has also warned about the proposed windfall tax in the UK. In a statement last week, the company’s CEO said that such a tax would hurt it significantly. Reports say that Jermy Hunt plans to propose an energy profits levy of 30%, a move that will push their headline rate of tax to 70%. The CEO warned that the new tax would make it impossible for companies to invest.

The next key catalyst for the Harbour Energy share price will be this week’s autumn budget scheduled for Thursday. It is in that budget that oil and gas companies will know their fate on the windfall tax. Further, the company has several projects in its pipeline like J-Area, GBP, Tuna, and in Indonesia.

Harbour Energy share price forecast

The daily chart shows that the HBR share price has been in a strong bearish trend in the past few months. It has plunged below the 25-day and 50-day moving averages. The Relative Strength Index (RSI) is approaching its oversold level. It also moved slightly below the important support level at 360p, the lowest level on October 31st.

The outlook for the stock is bearish, with the next key support level to watch being at 298p, the lowest level on July 6. A move above the resistance at 360p will invalidate the bearish view.

Harbour Energy share price