Harbour Energy (LON: HBR) has launched a $200m share buyback scheme, a move which could boost investor confidence following a windfall tax hit last month.
The independent operator is using the surge in oil prices to return cash to shareholders.
Harbour said it has entered into “irrevocable, non-discretionary agreements” with its corporate brokers to carry out the buybacks.
The aim of the programme is to reduce the company’s share capital and all ordinary shares purchased will be cancelled.
Harbour said the buybacks programme will end no later than December 31, 2022.
It comes after the operator pledged to return $100 million in dividends to shareholders, paid on May 18.
The move to boost shareholder returns come after Harbour Energy took a significant hit to its share price following the announcement of Rishi Sunak’s windfall tax last month.
Analysts have predicted that Harbour, along with firms including Serica and EnQuest, will be among the worst-hit.
Harbour saw a dip of 7.5%, erasing a large chunk of gains seen during the oil price rally on the back of the Russian invasion of Ukraine.
Jefferies said that, net the new investment allowance, the Energy Profits Levy could add $107m to the Harbour Energy tax bill this year and $268m next year
Over the last month, shares in the London-listed firm have dropped by 18%.
In March Harbour released its full year results for 2021, showing pre-tax profits of $314m on revenues of $3.4bn.
In a May trading update, the firm said it had slashed net debt from $2.3bn to $1.7bn.
CEO Linda Cook said at the time the firm has enjoyed a “strong start to the year” and said Harbour will “continue to invest in high return, infrastructure-led opportunities” within its base of offshore assets.
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