Britain's biggest oil and gas producer, Harbour Energy, revealed this morning it had fallen into the red in the first half of this year due to UK taxes.
The company has been a strong critic of the UK Government's windfall levy.
Losses after tax amounted to £6million, compared to profits of £773million for the same period in 2022.
Harbour said this plunge in its financial fortunes was driven by a higher UK tax rate and one-off tax charges.
Revenue was also down to £1.585billion as against £2.099million previously. The firm was impacted by lower oil production and falling commodity prices.
Output in the half year averaged 196,000 barrels of oil equivalent per day, as against 211,000 daily in the first half of 2022.
Strong position
But Harbour says it has entered the second half of the year in a strong position supported by a cash-generative asset base, a robust balance sheet, disciplined capital allocation and a prudent approach to risk management.
The firm adds that, at $80 a barrel for oil and 100p a therm for gas, it anticipates generating free cash flow of £790million during the year and to close 2023 in a small net debt position.
And it expects to be net debt free in the first half of 20242.
CEO Linda Cook said: "We remain focused on maximising the value of our UK oil and gas portfolio, advancing our organic development projects and disciplined capital allocation.
"This has allowed us to continue to generate significant free cash flow supporting material shareholder distributions while maintaining capacity for meaningful but disciplined M&A.
Strategic investment opportunities
"We have also progressed our strategic investment opportunities outside of UK oil and gas - in Indonesia, in Mexico and in CCS (carbon-capture and storage). These have the potential to materially increase our reserve life, support shareholder returns and diversify our company over time."
Harbour stated in May that the review of its British organisation, which will see hundreds of jobs going, is on track to complete in the second half of this year.
This study is expected to result in a reduction of around 350 onshore positions.
In April, the company confirmed plans to axe one fifth of its workforce, blaming the controversial windfall tax for deterring investment.
The majority of the jobs going are understood to be in Aberdeen.
Squeezed cash flows
Harbour has pointed to the chancellor's money grab having squeezed cash flows and put off financial backers.
In January, the firm said it was preparing to shift attention outside of the UK in response to the new levy.
Then, in March, the company revealed that the new tax had virtually wiped out its profits for the last year. Profits after tax at were less than £7million on turnover of more than £4.5billion.
- Ithaca Energy said yesterday that the UK windfall tax has "severely dampened" North Sea investment, warning the firm's production will drop next year.
The operator said there had been "deferral or cancellation" of investment at its own Greater Stella Area, along with developments it is partnered on like TotalEnergies' Elgin-Franklin and Repsol Sinopec's Montrose/Arbroath fields.
Energy Voice reports that the company also says the pace of investment on its pre-final investment decision projects has slowed due to the windfall levy. It adds it is continuing to highlight to the Treasury the impact of fiscal uncertainty on its "ability to make critical decisions on large-scale capital investments".
Ithaca is partnered on some of the UK's largest untapped discoveries like Cambo and Rosebank.