Harbour Energy PLC has signed an agreement to acquire LLOG Exploration Company LLC, an operator active in the Gulf of Mexico, for a total amount of $3.2bn. The transaction aims to increase reserves, improve cash flow, and strengthen the group’s position in a high-potential offshore region.
Structured financing and LLOG Holdings equity stake
The amount will be settled in two parts: $2.7bn in cash and $500mn through a share issuance to LLOG Holdings LLC, which will hold 11% of Harbour Energy’s capital following the transaction. The cash portion will be financed via a $1bn bridge facility, a $1bn term loan, and internal liquidity. The shares will be issued at a price of 215 pence, while Harbour Energy’s share was trading at 191.80 pence in London, down 7.1%.
Geographic expansion and strengthened production capacity
With this acquisition, Harbour Energy adds a fifth strategic hub to its existing operations in the United Kingdom, Norway, Argentina, and Mexico. LLOG brings 271 million barrels of oil equivalent (boe) in proved and probable (2P) reserves, representing a 22% increase in the group’s reserve base. The reserve life extends from seven to eight years.
Improved profitability and tax advantage
The company stated that the transaction enhances operating margins and reduces its effective tax rate. Harbour Energy also expects a significant increase in free cash flow per share starting in 2027. This development will support both debt reduction and a more competitive shareholder return strategy.
New distribution policy planned for 2026
The group plans to implement a payout ratio-based distribution strategy from 2026, including a base dividend and share buybacks. This approach is intended to align Harbour Energy with practices adopted by publicly listed North American and international oil and gas companies.
Completion of the transaction is expected by the end of the first quarter of 2026, subject to standard regulatory approvals.
