Insider: directors do deals at Harbour Energy, BP and Aviva

There’s been plenty of trading activity at some popular FTSE 100 and FTSE 250 companies over the past week. City writer Graeme Evans rounds up the action.

9th September 2024 09:13

Graeme Evans from interactive investor

The elevation of Harbour Energy (LSE:HBR) into the big league of global oil and gas independents has been marked by one of its senior directors doubling his stake in the FTSE 250 company.

Former Shell (LSE:SHEL) finance boss Mike Henry’s investment of £58,000 took place a day after Harbour completed its transformational acquisition of upstream Wintershall Dea assets.

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The $11.2 billion deal added material positions in Norway, Germany, Argentina, Mexico and North Africa, trebling Harbour’s production to about 475,000 barrels of oil equivalent per day.

Harbour, which last year delivered 15% of UK oil and gas production, now has Woodside, US-based Hess and Aker BP in its peer group rather than smaller Energean or Murphy Oil.

It revealed the deal last year at a time when the introduction and subsequent extension of the government’s Energy Profits Levy had caused Harbour to review UK activities.

The Wintershall acquisition is the fourth in the company’s 10-year history, having acquired Chrysaor Holdings and a package of UK North Sea assets from Shell for $3 billion in 2017.

This was followed in 2019 by the acquisition of ConocoPhillips UK North Sea for $2.7 billion, making the company the UK’s largest oil and gas producer. In 2021, the all-share merger between Chrysaor and Premier Oil resulted in Harbour securing a London listing.

Following Tuesday’s completion of the Wintershall acquisition, the company is now owned 45.5% by Harbour's legacy shareholders, 39.6% by BASF and 14.9% by investment business LetterOne. Harbour’s net debt on completion is about $4.5 billion.

Harbour has reiterated its commitment to increase its annual dividend from $200 million to $455 million, meaning that shareholders can expect an approximate 5% increase from the 25 US cents a share paid in 2023 to 26.25 cents for 2024.

The deal has the support of Bank of America after it said this summer that shares deserve to be 450p, which compares with 273.7p at Friday’s close. The bank forecast a 2025 free cash flow yield of 25% based on Brent Crude at $80 a barrel and still above 20% at $70 a barrel.

It noted at the time that close peers Var Energi and Aker BP were trading at a 50% premium despite comparable cost bases and cash margin economics.

Bank of America added: “We see Harbour’s equity story transformed with the Wintershall deal: tripling production, diversifying the portfolio, lowering its cost base and ultimately delivering a step change in cash flow visibility.”

Henry, who is Harbour’s senior independent director, bought his 20,000 shares at an average price of 288.1p. It is his first purchase in almost two years, having previously picked up 10,000 Harbour shares in both August 2021 and October 2022.

Elsewhere in the oil sector, BP (LSE:BP.) announced on Friday that non-executive director Hina Nagarajan had spent £20,000 on the FTSE 100 company’s shares at a two-year low price of 407.5p.

The purchase by the chief executive of Diageo India came at the end of a week in which Brent Crude traded at its lowest level since December 2021 at close to $71 a barrel.

As we reported last week, the commodity price pressure has fuelled City worries about the sustainability of BP’s share buyback commitments heading into next year.

However, plenty of retail investors share Nagarajan’s view of a buying opportunity after BP topped interactive investor’s list of most traded stocks on Friday morning.

Aviva (LSE:AV.) chief executive Amanda Blanc and husband Ken last week increased their shareholdings in the FTSE 100 insurer by spending £62,375 at prices close to a multi-year high.

Their dealings took place on Wednesday at 499p, having also bought a combined £80,000 in March when the insurer’s shares were about 470p.

Aviva’s shares closed last week at 488.4p amid a downbeat finish for the FTSE 100 index. UBS recently highlighted a price target of 590p as its top pick in UK life insurance, believing there is more to go for as Aviva shifts towards higher multiple capital-light businesses.

A week earlier, Aviva non-executive director Andrea Blance spent £75,000 on shares at a price of 495p. The former Legal & General chief risk officer has been on the board since February 2022.

Among other purchases last week, Genus (LSE:GNS) chair Iain Ferguson and wife Catherine disclosed they had spent a total of £178,000 buying shares in the animal genetics firm.

Their investments took place on Thursday at between 1,763p and 1,801p after the FTSE 250 company posted results showing an 8% drop in annual profits to £59.8 million.

Genus has been impacted by challenging China market conditions although it expects an improvement in 2025 profits when excluding current headwinds from foreign exchange.

Broker Peel Hunt, which has a price target of 3,100p, said: “China has continued to be difficult, but producers have been achieving positive results in recent months. It is too early to call a turn, but the outlook is potentially brighter.”

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Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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