Harbour Energy PLC (LSE:HBR) shares traded positively on Monday, after it sealed its latest piece of North Sea consolidation, acquiring more of its Catcher field.
The independent oiler agreed to buy substantially all the subsidiaries of Waldorf Energy Partners Ltd and Waldorf Production Ltd, which are currently in administration, in a deal worth $170 million.
It intends to fund the acquisition from existing liquidity, and the deal is expected to complete in the second quarter of 2026.
The acquisition is expected to add oil-weighted production of around 20,000 barrels per day of extra production and 35 million barrels of oil equivalent reserves.
Harbour noted the deal will increase its operated interest in the Catcher field to 90% from 50%, and provide a 29.5% non-operated interest in the Kraken oil field in the Northern North Sea.
Harbour also expects the transaction to unlock operational and financial synergies, including the release of an estimated $350 million of cash currently posted to secure decommissioning liabilities and the addition of Waldorf’s UK ring fence tax losses.
“This transaction is an important step for Harbour in the UK North Sea, building on the action we've already taken to sustain our position in the basin," said Harbour's UK managing director, Scott Barr.
In London, stockbroker Zeus Capital repeated a 'buy' recommendation following the news, highlighting the 'significant tax losses' being acquired in the deal, plus other corporate and operational benefits (including some related to decommissioning). The accrued losses could amount to some $900 million of tax 'offsets', according to analyst Daniel Slater.
"This is a very sensible deal for Harbour, both growing near-term production and likely reducing the company’s UK tax exposure. It should also quickly prove cash positive if decommissioning deposits are returned to the company," the analyst said.
He added: "Waldorf has had to post substantial cash deposits against its decommissioning liabilities of US$720m due to its financial position. Harbour expects to leverage its investment grade balance sheet to post bank guarantees to unlock US$350m of existing cash decommissioning provisions currently set aside by Waldorf.
"This should further strengthen Harbour’s cash balance, and would make the deal immediately cash positive for Harbour."
Harbour shares moved up 1% in Monday's trade to 208p, albeit the price was seen as high as 212p in earlier exchanges.