EnQuest Sees 20% Higher Oil Production in 2019

By Noor Zainab Hussain
Wednesday, December 5, 2018

EnQuest expects to produce about 20 percent more oil next year as the indebted British North Sea producer strives to recover from a series of minor setbacks at its flagship field.

The company said on Wednesday it expected to produce between 63,000 and 70,000 barrels of oil equivalent per day (boepd) in 2019, compared with a forecast 54,000-56,000 boepd this year.

EnQuest, which specializes in squeezing more barrels out of ageing fields, has suffered a handful of system outages and equipment repairs at its key Kraken field this year, one of the largest North Sea developments that started production in 2017.

RBC analysts had hoped for a stronger pick-up in 2019.

The production guidance, "which includes the additional production from Magnus and DC4 wells at Kraken, is lower than we had expected due to the continued uptime issues at Kraken," they wrote in a note to clients.

EnQuest shares were down 0.7 percent to 23.95 pence at 1020 GMT.

The company has a 70.5 percent stake in the Kraken field, while Cairn Energy owns the rest.

EnQuest switched from plans to sell a stake in the field to borrowing money against it after two sets of sale talks had to be abandoned as a deadline for a debt repayment approached, industry and banking sources told Reuters in September.

A stake sale would have helped the company reduce its debts.

EnQuest said its net debt stood at $1.77 billion at the end of October, down from $1.97 billion at the end of June, broadly in line with RBC analysts' expectations.

"We have continued to deliver in line with our 2018 production targets ... We have also made good initial progress in reducing our debt ... and we will continue to prioritize debt reduction through 2019 and beyond," Chief Executive Amjad Bseisu said.

EnQuest said the acquisition of additional interests in its Magnus field, the Sullom Voe oil terminal and connected infrastructure was completed at the start of December.

The company launched a discounted $138 million rights issue to help it to buy the rest of Magnus from BP Plc in September.


(Reporting by Noor Zainab Hussain; Editing by Bernard Orr and Mark Potter)

Categories: Offshore Energy FPSO Europe Oil Production

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