Harbour Energy (LON: HBR) shares fell on Monday after the oil and gas producer announced a $3.2bn acquisition of LLOG Exploration, a move that marks its entry into the deepwater U.S. Gulf of America.
The stock was down 2.6% at 201p in morning trading.
The company has agreed to buy the privately held LLOG from LLOG Holdings for $2.7bn in cash and $0.5bn in Harbour shares, establishing a new core business unit alongside its existing operations in Norway, the UK, Argentina and Mexico.
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Harbour stated that the deal “establishes a top-tier position” in deepwater US Gulf of Mexico (Gulf of America) and strengthens its global portfolio.
Chief executive Linda Cook said the acquisition delivers on Harbour’s “long-standing ambition” to enter the region, adding that LLOG brings “high-quality assets and a talented team” with a strong strategic and cultural fit.
She added that the oil-weighted portfolio would enhance production, extend reserve life and improve margins.
LLOG’s assets include operated fields such as Who Dat, Buckskin and Leon-Castile, with current production of 34,000 barrels of oil equivalent per day and a 2P reserve life of 22 years.
Harbour said production from the assets is expected to approximately double by 2028, supported by a leading position in the Lower Tertiary Wilcox play.
The acquisition is expected to add 271 million barrels of oil equivalent of 2P reserves, increasing Harbour’s total by 22%, and to be free cash flow per share accretive from 2027. Chief financial officer Alexander Krane believes the deal will materially enhance free cash flow while supporting an investment-grade balance sheet.
Completion is expected in late first-quarter 2026, subject to regulatory approvals.
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