EnQuest profits rise

EnQuest's profits before tax and net finance costs rose by 36.3% to $237.1m in 2016.

Production averaged 39,751 barrels of oil equivalent per day in 2016, up 8.7% on 2015 and unit operating costs fell to $24.6/bbl compared with $29.7/bbl in 2015.

Revenues and other operating income fell by 6.3% to $849.6m but EBITDA rose by 0.6% to $477.1m.

The company said the Kraken development continued under budget and on track for first oil in Q2 2017 and it confirmed 2017 average production guidance, in the range of 45,000 Boepd to 51,000 Boepd for the full year - dependent on the timing of Kraken first oil.

Chief executive Amjad Bseisu said: "EnQuest further streamlined its operations in 2016 and delivered cash capital expenditure at $609 million and unit opex at $24.6/bbl, both well down on the previous year.

"Operationally EnQuest worked at high levels of production efficiency and safely delivered production averaging 39,751 Boepd, our highest annual production figure, supporting our financial objectives.

"2016 saw the successful restructuring of our balance sheet, designed to strengthen EnQuest's liquidity position, to reduce the level of its cash debt service obligations and to enable it to bring the Kraken development onstream.

"In early 2017, EnQuest securely moored the Kraken FPSO on station in the North Sea, where commissioning work continues on the vessel and the subsea infrastructure; preparations for the handover to operations are ongoing. The project remains below budget and on track to deliver first oil in Q2 2017.

"In early 2017, EnQuest and BP announced EnQuest's proposed acquisition of interests in the Magnus oil field and the Sullom Voe oil terminal.

"The innovative structure of the acquisition recognises EnQuest's differential strength in managing maturing assets and infrastructure, whilst generating significant potential for future growth.

"EnQuest's combination of integrated technical capabilities and high levels of production efficiency and cost control ideally positions us to create value from assets such as Magnus and from the substantial potential in our existing asset portfolio, with 215 MMboe of net 2P reserves at the end of 2016.

"Our journey to optimise and increase production and reduce costs continues, with average 2017 production anticipated to be between 45,000 Boepd and 51,000 Boepd.

"Following delivery of Kraken, EnQuest will begin moving from a period of heavy capital investment into one focused on cash generation and deleveraging the balance sheet."