Harbour Energy, Edinburgh, Scotland, has agreed to acquire LLOG Exploration Company LLC from LLOG Holdings LLC, Covington, La., for $3.2 billion, marking its entry into the deepwater U.S. Gulf.
The consideration comprises $2.7 billion in cash and $0.5 billion in Harbour voting ordinary shares. The transaction is expected to complete in late Q1 2026, subject to customary regulatory approvals.
The acquisition establishes the Gulf of Mexico — renamed by the Trump administration as the Gulf of America — as a new core business unit for Harbour, alongside Norway, the U.K., Argentina, and Mexico. Following completion, LLOG will operate as Harbour’s Gulf of America business unit and will retain the LLOG name.
LLOG operates more than 80 leases in the Gulf of America and has a portfolio of drilling and exploration opportunities, including up to eight potential wells across 2026 and 2027.
LLOG brings operated, oil-weighted deepwater assets with production of about 34,000 barrels of oil equivalent per day, operating costs of around $12 per barrel and a blended tax rate of approximately 23%. Key assets include the Who Dat field in Mississippi Canyon and the Buckskin and Leon-Castile fields in Keathley Canyon. The portfolio has a 2P reserves life of around 22 years, and production is expected to approximately double by 2028.
Harbour said the deal will add 271 million barrels of oil equivalent of 2P reserves, increasing its total 2P reserves by about 22% and extending overall reserves life from seven to eight years. Harbour expects group production to be around 500,000 boepd to the end of the decade. The company said the transaction is expected to be free cash flow per share accretive from 2027.
The cash portion of the purchase price will be funded through a $1 billion underwritten bridge facility, a $1 billion term loan, and existing liquidity. Harbour will issue 174,855,744 new voting ordinary shares to LLOG Holdings, valuing the equity consideration at $0.5 billion. On completion, LLOG Holdings will own about 11% of Harbour’s voting ordinary shares, with 70% of those shares subject to a one-year lock-up.
The Harbour board has unanimously recommended the transaction, stating it is in the best interests of the company and its shareholders. The board said the acquisition supports its investment-grade balance sheet and strengthens its long-term free cash flow profile. The company also reiterated its intention to move to a payout-ratio-based distributions policy from 2026, combining dividends and share buybacks.
Linda Z Cook, CEO Harbour, 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. The oil-weighted, deepwater LLOG portfolio enhances our production profile, provides significant operational control, extends reserve life, and improves our margins. In addition, the LLOG organization brings decades-long experience in the Gulf of America with a successful track record, creating a solid foundation for Harbour in the area.”
Philip LeJeune, LLOG CEO, said, “We are pleased to be joining an outstanding company and believe that by uniting our teams and expertise, we’re unlocking new possibilities, empowering our people, and setting the stage to achieve extraordinary results with Harbour. As we look to the future, we remain dedicated to maintaining the same high ethical and operational standards that have helped guide us for the past 48 years, but with a new partner whose shared vision of growth, innovation, and operational excellence will help us achieve significant successes through a strong collaborative culture.”
