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Trading statements

EnQuest output at record levels

24 January 2017 08:07

EnQuest's output averaged 39,751 barrels of oil equivalent per day in 2016, up 8.7% on 2015, with production in the UK North Sea up 11.3%.

This was EnQuest's highest annual production since the company started in 2010.

Final production was adversely affected by the shutdown period at the end of the year, where maintenance of the Brent Pipeline System took more than a week longer than was anticipated, with winter weather also hampering the work necessary to bring production fully back onstream.

EnQuest said: "Final reported 2016 unit opex is expected to be around the lower end of latest full year guidance range of $25/bbl to $27/bbl.

"Reported 2016 cash capex is also expected to be around the lower end of the range, of $620m to $670m.

"Net debt as at 31 December 2016 expected to be approximately $1.8bn."

Outlook highlights:

- The Kraken FPSO has arrived in the North Sea on schedule and is continuing under budget and on track for delivery of first oil in Q2 2017

- Production in 2017 is expected to average in the range of 45,000 boepd to 51,000 boepd for the full year and will be dependent on the timing of Kraken first oil

- EnQuest is on course to further reduce average unit opex, in 2017 in the range of $21/bbl to 25/bbl including Kraken production an it continues to seek cost reductions across the supply chain

- Cash capital expenditure will reduce in 2017 and is expected to be in the range $375m to $425m, the majority of which is being invested in the Kraken development

- Hedging of 6 million barrels is in place for 2017, at an average of c.$51/bbl

- EnQuest has agreed to acquire from BP an initial 25% interest in the Magnus oil field as well as a 3.0% interest in the Sullom Voe oil terminal and supply facility, 9.0% of the Northern Leg Gas Pipeline and 3.8% of the Ninian Pipeline System.

Chief executive Amjad Bseisu said: "EnQuest is delivering reductions in operating and capital expenditure and we continue to streamline our operations.

"Our low cost operating structure and our low cost approach to operatorship are integral parts of our way of doing business - whilst always retaining safe operations as our number one priority.

"The average production of 39,751 Boepd in 2016 included good performance at Heather/Broom and at PM8/Seligi with a promising start after first oil from Scolty/Crathes.

"Delayed and extended third party shutdowns reduced production at the end of the year, and productivity from Alma/Galia has been negatively impacted by well performance including ESP reliability.

"Discussions with the ESP supplier on rectification plans are ongoing.

"The Kraken development remains under budget and on schedule for first oil in Q2 2017."

At 8:07am: (LON:ENQ) EnQuest Plc share price was +2.75p at 52p

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