EnQuest 2018 Production On Target And Magnus Acquisition Complete

LONDON (Alliance News) - North Sea-focused oil and gas firm EnQuest PLC on Wednesday said its 2018 production is on target and its acquisition of the Magnus oil field is complete.

Shares in EnQuest were down 1.7% at 23.70 pence on Wednesday.

On Saturday, EnQuest acquired additional interests in Magnus, located in the UK North Sea to the north-east of the Shetland Islands, and is now 100% owner. EnQuest also acquired further interest in the Sullom Voe Terminal, which it operates, and associated infrastructure.

Both of these assets were acquired from BP PLC.

EnQuest's share of the acquisition was funded through its USD127 million net rights issue proceeds, which were received in October.

In the ten months to October 31, EnQuest's average production was 54,268 barrels of oil equivalent per day, up 53% from 35,410 barrels the year before.

Net daily average production at its Kraken field, located in the East Shetland basin, was 22,156 barrels of oil per day in the same period.

For 2018, production is expected to be between 54,000 and 56,000 barrels of oil equivalent per day.

EnQuest said, however, that system outages and equipment repairs have limited performance at its Kraken field and average 2018 production is likely to remain at its current level.

As at October 31, net debt including payment-in-kind and net rights issue proceeds was USD1.77 billion while cash and available bank facilities totalled USD386.6 million.

EnQuest said that cash generation has allowed further early repayment of USD65 million worth of bank debt in November, cutting its term facility to USD785 million.

Looking ahead to 2019, EnQuest's average production is forecast to grow a further 20% to between 63,000 and 70,000 barrels of oil equivalent per day, driven by the additional Magnus equity.

Also in 2019, gross production at Kraken is likely to be in the 30,000 to 35,000 barrels of oil per day.

EnQuest Chief Executive Amjad Bseisu said the firm "will continue to prioritise debt reduction through 2019 and beyond" and is assessing " further value accretive, short-cycle opportunities" at Magnus and Kraken, as well as elsewhere in its portfolio.