EnQuest Expects 2019 Production Up By 20% As Magnus Oil Output Surges

LONDON (Alliance News) - EnQuest PLC on Tuesday reported double-digit growth in 2018 production, boosted by strong performance at the Magnus oilfield in the UK North Sea.

The stock was trading 2.9% higher on Tuesday morning at 19.56 pence a share.

The petroleum exploration and production company reported average production of 55,447 barrels of oil equivalent per day in 2018, up 48% on the year prior and above the mid-point of revised guidance.

The growth was boosted by a strong performance at Magnus, which delivered 21,528 barrels of oil equivalent daily in December.

Back in September, EnQuest has exercised an option to acquire the remaining 75% interest in the Magnus from the British oil major BP PLC. The transaction, worth USD300 million, was completed in December.

Meanwhile, average gross production at Kraken field, also in North Sea, totalled 30,310 barrels of oil equivalent a day, below the company's expectations. EnQuest said that throughout 2018, production was limited by a number of weather related and floating production storage and offloading production system outages.

Average production in Malaysia in 2018 of 8,432 barrels of oil equivalent a day was 5.7% lower than the year before, primarily reflecting natural declines at Tanjong Baram offshore field.

Looking forward, EnQuest said it expects its production to climb by 20% in 2019 to between 63,000 and 70,000 barrels of oil equivalent daily, as the strong performance at Magnus has continued through January.

While FPSO availability at Kraken has continued to limit production from the field, EnQuest said there is no change to the full-year expected gross production of between 30,000 and 35,000 barrels of oil per day.

"The group delivered on its operational targets for 2018, growing production by 48%. This performance and higher realised prices has facilitated accelerated repayments of the Group's credit facility," said Chief Executive Amjad Bseisu.

As at December 31, EnQuest had net debt of USD1.77 billion, with cash and available bank facilities of USD309 million.

"Our focus on cost control and capital discipline, combined with our improved cash generation capability enables further repayment of debt, which remains the priority for the group," added Bseisu.