EnQuest Swings to First-half Loss on UK Windfall Tax on Oil & Gas Sector

British North Sea-focused oil producer EnQuest reported a loss after tax for the first half of this year on Tuesday, hit by the UK's windfall tax on the sector.

The company, which has operations in the UK and Malaysia, reported loss after tax of $21.2 million for the six months ended June 30, compared with a profit of $203.5 million a year earlier. 

"The UK's oil and gas sector faces significant challenges and loss of competitiveness due to uncertainty following the adverse changes to the fiscal regime," CEO Amjad Bseisu said in a statement. 

The company, which had net debt of about $592 million as of June-end compared with a market value of about $414.9 million, reported a nearly 58% drop in half-year free cash flow to $140 million as it further repaid its debts. 

EnQuest had earlier said it expected 2023 output to be lower than last year due to natural declines and planned maintenance shutdowns at its flagship UK oilfields Magnus and Kraken in the third quarter. 

It said it still expected its full-year production to be within its previous forecast range of 42,000 to 46,000 barrels of oil equivalent per day (boepd). 

(Reuters - Reporting by Richard Rohan Francis in Bengaluru; Editing by Rashmi Aich)

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