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Harbour Energy (HBR) Share Price Surged 3.1% on Drilling Results. Is the Firm a Buy?

Simon Mugo trader
Updated 30 Dec 2021

Key points:

  • Harbour Energy just announced its drilling programme at the Dunnottar exploration well.
  • The oil and gas company encountered some margin hydrocarbon deposits within three intervals, which it plans to explore further.
  • However, are the company’s shares a good buy at current prices as we head into 2022?

The Harbour Energy PLC (LON: HBR) share price surged 3.1% after announcing that it had completed the drilling of the Dunnottar exploration well (30/8-4) in the UK North Sea.

The company said that it had encountered marginal hydrocarbon deposits within the Jurassic, Palaeocene, and Triassic intervals.

The oil company said that it had drilled a total measured depth of 15,639 feet and would be assessing the commercial potential of the marginal accumulations identified during the drilling.

Meanwhile, Harbour Energy intends to plug and abandon the well. For those wondering whether the company is a good investment in 2022, you should know that analysts at JP Morgan have a 545p price target on the oil company.

JP Morgan’s price target represents a 52% premium to Harbour Energy’s current share price indicating significant upside potential.

The UK oil company’s share price is trading down 8.84% for the year after trimming its 2021 production targets due to challenges at its Tolmount gas project in the UK North Sea.

As we head into 2022, the company may benefit from rising oil prices and higher global demand for the commodity, which could drive its share price higher, but it has to get its production higher.

However, market analysts, including me, are not always right. Given the multiple headwinds facing the global economy, we could easily see Harbour Energy share prices fall further in the new year.

The first significant challenge facing the global economy is the emergence of new variants of the coronavirus, such as the Omicron variant, which has forced many countries to reimpose movement restrictions that could derail the global economy.

The shifting stance among major central banks to tighter monetary policies is likely to significantly negatively impact the global economic recovery, leading to lower crude oil demand and sales for Harbour Energy.

Therefore, investors should weigh all the above factors before deciding whether to invest in Harbour Energy. As for me, I am adopting a wait and see approach and will not be buying the shares just yet.

*This is not investment advice. Always do your due diligence before making investment decisions.

Harbour Energy share price.

Tradingview chart of Harbour Energy share price 30-12-2021
Source: Tradingview

Harbour Energy share price edged 3.1% higher to trade at 365.6p, rising from Wednesday’s closing price of 354.6p.

Should you invest in Harbour Energy shares?

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Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading