The largest producer of fossil fuels in the UK's North Sea has reported a loss after tax of $8 million (£6.3m).

Harbour Energy also said it will extract less oil and gas than expected this year.

The London-listed firm, which last year complained its profit had been wiped out by the windfall tax on oil and gas companies, revealed that its tax bill was lower now than it had been before the tax was introduced.

It paid $437m (£344m) in tax during the six months to the end of June, as pre-tax profit fell from $1.5bn (£1.2bn) to $429m (£337m).

The loss after tax was set against a profit of $1bn (£800m) for the comparable six months the previous year.

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The hit to its profits had largely been due to the reduction in the price of fossil fuels, especially natural gas in the UK.

Lower energy costs, which have benefited most other people and businesses, hit the bottom line at Harbour during the period.

In the first half of 2022 the business sold crude oil for $82 per barrel.

That dropped to $76 in the first half of this year.

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The price of gas in the UK, measured in therms, fell from 69p to 58p over the same time.

The amount of oil and gas that Harbour produced also reduced slightly from 211,000 barrels of oil equivalent per day to 196,000.

It expects production to fall further in the second half of the year due in part to drilling delays at one of its UK oil fields.

Overall, across 2023, production is expected to be 185,000-195,000 barrels per day.

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The firm said it has agreed the sale of its Vietnam business and is targeting completion by the year-end. It said its 2023 forecasts and guidance “reflect the assumption that we will continue to recognise the results of our Vietnam business in our financial statements up until year-end”.

Linda Cook, Harbour chief executive, said: "We remain focused on maximising the value of our UK oil and gas portfolio, advancing our organic development projects and disciplined capital allocation.

"This has allowed us to continue to generate significant free cash flow supporting material shareholder distributions while maintaining capacity for meaningful but disciplined M&A (mergers and acquisitions).

"We have also progressed our strategic investment opportunities outside of UK oil and gas - in Indonesia, in Mexico and in CCS (carbon capture and storage).

"These have the potential to materially increase our reserve life, support shareholder returns and diversify our company over time."

Shares in Harbour Energy closed down 4.47%, or 10.8p, at 230.9p.