Harbour Energy share price is still at risk despite dividend boost

Harbour Energy (LON: HBR) share price has been in a steep sell-off after peaking at 526p in May 2022. It has crashed by almost half, amid rising concerns about UK’s windfall taxes and the company’s future in the country. The stock fell to a low of 270, the lowest level since November 2020. 

Harbour Energy and windfall taxes

The UK was one of the top countries that ordered energy companies to pay windfall taxes on their profits. That move was criticized by free markets proponents and companies themselves. The impact of the harsh treatment of these companies is emerging.

Last week, FT reported that Shell’s new CEO considered shifting the company’s headquarters to the United States. While that move has not happened yet, there is still a likelihood that it will happen in the next few years.

On Thursday, Harbour Energy warned about the impact of the taxes. In its report, the company said that these taxes had taken most of its profit. As a result, its total profits came in at just $8 million, down from the prior year’s $101 million. The company paid a $1.5 billion tax charge because of these taxes.

The company has started scaling down its investments in the UK, where it produces 200k barrels of oil per day. Further, the management warned that the harsh treatment will see it slash workers in the country in a bid to save costs.

At the same time, the company said that it reduced its total debt to about $800 million. It also boosted its shareholder returns, including $100 million dividends and more buybacks.  Analysts believe that the company will boost its dividend or buyback this year if crude oil prices remain elevated. For the year, Harbour Energy expects that it will produce 185-200 kboepd.

Harbour Energy share price forecast

HBR chart by TradingView

The daily chart shows that the HBR stock price has been in a bearish trend in the past few months. It now sits slightly above the key support level at 268.9p, the lowest level since July 2021. The stock has moved below the 25-day and 50-day moving averages. At the same time, the MACD remains slightly below the neutral level.

Therefore, the stock is on the cusp of another bearish breakout in the coming months. If this happens, the next key support level to watch will be at the psychological point at 250p. A move above the 50-day moving average will invalidate the bearish view.