Drill, child, drill! Harbour Energy snaps up Gulf of Mexico rival because it expands past excessive tax North Sea

British oil and gas explorer Harbour Energy is snapping up a rival in the Gulf of Mexico for £2.4billion as it continues to expand beyond the North Sea.

The FTSE 250 firm said it would buy deepwater oil and gas group LLOG Exploration, which put itself up for sale following the death of its founder Gerald Boelte.

The deal comes as Harbour looks beyond the North Sea to areas such as Norway, Argentina and the Gulf of Mexico to boost production.

North Sea operators are still reeling from the windfall tax on the sector with Harbour shedding 700 jobs since the so-called Energy Profits Levy was introduced in 2022.

Labour has also banned new oil and gas exploration licences.

Industry group Offshore Energies UK estimates 1,000 jobs are being lost in the North Sea every month the windfall tax is in place. 

The oil and gas industry estimates 1,000 jobs are being lost in the North Sea every month

At the same time, the Gulf of Mexico remains a prime target for the industry because of its vast deepwater reserves, easy access to US infrastructure and long-term production potential.

Its appeal has been boosted by Donald Trump’s ‘drill, baby, drill’ promotion of oil and gas exploration over investment in renewable energy.

The President has even sought to change the name of the Gulf of Mexico to the Gulf of America.

The acquisition will help Harbour’s overall production reach about 500,000 barrels of oil equivalent per day by the end of the decade, the company said.

Shares in the company fell more than 7 per cent in early trading however, which Jefferies analyst Mark Wilson attributed to investor concern over the effect of the deal on Harbour’s balance sheet.

The deal will consist of £2billion in cash and £400million in Harbour shares.

Harbour chief executive Linda Cook said: ‘Today’s announcement delivers on Harbour’s long-standing ambition to establish a presence in the deepwater Gulf of America. With LLOG, we found the right combination of high-quality assets and a talented team, providing a strong strategic and cultural fit with our company.

‘The transaction positions us as a leading player in a region with well-established infrastructure, a supportive fiscal and regulatory environment and opportunities for additional growth.’