(Alliance News) - EnQuest PLC on Thursday said it swung to a pretax loss in an "extremely challenging" 2020 due to damage caused by the Covid-19 pandemic on the oil and gas industry.
The oil and gas production company that operates in UK North Sea and Malaysia's 2020 was revenue USD856.9 million, down 50% from USD1.71 billion in 2019, while it swung to pretax loss of USD20.0 million from USD442.2 million profit. EnQuest said these decreases reflected the materially lower realised prices and lower production.
2020 production averaged 59,116 barrels of oil equivalent per day, down 14% from 68,606 in 2019, slightly below the mid-point of its 57,000 to 63,000 barrels per day guidance. This drop primarily reflected the decision to cease production at the Heather/Broom and Thistle/Deveron fields, which during 2019 contributed 6,000 barrels of oil equivalent, EnQuest said.
"We generated USD211.1 million of free cash flow in the year, having significantly lowered our cost base and free cash flow breakeven, enabling us to reduce our debt to its lowest level since 2014. Capital and operating expenditures reduced by USD295.6 million and free cash flow breakeven for the year was USD31.9 per barrels of oil equivalent, both in line with our targets. We successfully managed the unique set of challenges presented in 2020, taking decisive action to protect and enhance our business," said Chief Executive Amjad Bseisu.
Looking ahead, EnQuest said it expects 2021 average production to be between 46,000 and 52,000 barrels of oil equivalent per day.
"Our focus on extending the useful lives of existing assets through operational improvements and reducing emissions is well suited to operating through the energy transition and I am confident that EnQuest is well placed to succeed in a changing world," said Bseisu.
Shares in EnQuest were down 6.6% at 18.78 pence in London on Thursday.
By Zoe Wickens; zoewickens@alliancenews.com
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Enquest (ENQ)