UK E&P: Re-rated, Refocused - Retain Buy ITH, SQZ, ENQ - Downgrade HBR to Hold

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UK E&P: Re-rated, Refocused - Retain Buy ITH, SQZ, ENQ - Downgrade HBR to Hold

ement in the stock. ITH management

have been clear that both UK and International M&A potential remains — but within a value 0 AKRBP ITH TLW TALO VAR SQZ KOS HBR GPRK IPCO PHAR ENQ ENOG NWMD DNO CNE GKP GENL

perspective. Given track record & M&A potential, we factor in increased premium above NAV in

.

our 350p PT while '26E FCF +79% to $952m for 15% FCF yield. Source: Jefferies estimates, company data, Factset.

HBR LN: Commodity price helping structural issues, d/g to Hold, PT to 320p PT. We saw Listed E&P Peers - EV/2P+2C Trading Metrics

Harbour Energy's Dec '25 acquisition of LLOG as a game changer of a deal. We retain that 20 $/boe Current EV/(2P+2C) Simple avg

view, given it enabled entry to US Gulf. HBR has proven ability on international cross-border 15 13

M&A of real scale. Operational delivery has also been impressive, particularly in UK North Sea, 10 10 9 9 10

7 7growing production y/y in 2025 while de-emphasising UK investment LINK. However, there 5.2

6 4 4 4 3is a drag in HBR's investment case overall, due to equity dilution and increased debt load 5 2 2 2 1 1

0from its M&A deals since Wintershall Dea. Additionally, HBR still lacks, in our view, a material 1

active shareholder that would endorse and enable the investment case from here (note 17 AKRBP TALO ITH GPRK VAR SQZ KOS TLW ENOG NWMD HBR PHAR DNO IPCO ENQ GENL GKP CNE

May 2026, "BASF...disposal of 150m ordinary shares, 9.9%...to Altor Finance Limited, an entity .Source: Jefferies estimates, company data, Factset.

sharing common ultimate ownership with BW Group"). With arguably growth M&A behind it

and without a clear organic growth story ahead, we see the stock re-rating as an opportunity 2027 JEFe UK North Sea Production