(Alliance News) - EnQuest PLC on Thursday said it met its output guidance in 2020 and also announced it will pay an initial USD325 million to acquire a stake in a UK North Sea oilfield.
Shares in the company were 7.7% lower at 12.76 pence each in London on Thursday morning.
EnQuest said it will buy Suncor Energy UK Ltd's near 27% stake in the Golden Eagle area, which includes the Golden Eagle, Peregrine and Solitaire fields. It adds roughly five million barrels to EnQuest's net contingent, or 2C, resources.
The company will pay an initial USD325 million for the stake "with additional contingent consideration of up to USD50 million".
"The contingent consideration is payable in the second half of 2023, if between July 2021 and June 2023 the dated Brent average crude price equals or exceeds USD55 a barrel, upon which USD25 million is payable, or if the dated Brent average crude price equals or exceeds USD65 a barrel, upon which USD50 million is payable," EnQuest explained.
A barrel of Brent fetched USD58.76 on Thursday morning in London.
Golden Eagle is a "high-quality, low-cost UK North Sea development" which adds "immediate material production" to EnQuest, Chief Executive Amjad Bseisu said.
Turning to 2020 operations, EnQuest said output averaged 59,116 barrels of oil equivalent per day, down 14% from 68,606 boepd in 2019.
UK Upstream output improved 2.5% to 50,334 boepd, but in UK Decommissioning, it slumped 78% to 2,346 boepd.
"During 2020, our operations remained materially unaffected by the Covid-19 pandemic and the group delivered in line with its production guidance, with a particularly strong performance at Kraken," CEO Bseisu said.
At EnQuest's UK Kraken asset, gross output rose by 5% to 37,518 boepd in 2020.
For 2021, EnQuest expects group average output of between 46,000 and 52,000 boepd and operating expenditure of around USD265 million.
EnQuest's gross output guidance for Kraken in 2021 is between 30,000 and 35,000 barrels of oil per day.
By Eric Cunha; ericcunha@alliancenews.com
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Enquest (ENQ)