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EnQuest PLC, 4 February 2021
EnQuest signs agreement to acquire equity interest in the Golden Eagle development
EnQuest PLC (together with its subsidiaries, 'EnQuest'), an independent oil and gas production and development company listed on the London and Stockholm stock exchanges (ENQ.L and ENQ.ST), is pleased to announce it has signed an agreement with Suncor Energy UK Limited ('Suncor') to purchase Suncor's entire 26.69% non-operated equity interest in the Golden Eagle area, comprising the producing Golden Eagle, Peregrine and Solitaire fields ('the Transaction') for an initial consideration of US$325 million.
-- Adds immediate incremental production of c.10 kboepd, c.18 MMbbls to net 2P reserves and c.5MMbbls to net 2C resources(1)
-- Provides significant value enhancement in excess of US$100 million NPV(10)(1) at a long-term oil price of US$50/bbl, primarily related to accelerated partial use of EnQuest's tax losses
-- Low cost structure with 2021 unit operating expenditure expected to be c.US$5/Boe and life of field operating and capital expenditure anticipated to be c.US$20/Boe(1)
-- Significant remaining development potential, with anticipated field life extending into the early 2030's(1) :
-- Four-well infill drilling programme ongoing, with two of the four wells onstream. The programme is scheduled to conclude prior to completion of the Transaction, which is expected to take place no later than the end of the third quarter
-- A number of unsanctioned activities associated with further sub-sea and platform infill drilling, topsides water debottlenecking and an active well intervention programme are being assessed
-- Various third-party near-field tie-back opportunities being considered to utilise available capacity of the facilities
-- Strong safety record with zero lost time injuries since start-up and zero safety critical maintenance backlog at the end of 2020
-- Materially lower CO2e intensity ratio than UK North Sea industry average
(1) EnQuest estimates
EnQuest Chief Executive, Amjad Bseisu, said:
"We are delighted we have agreed the acquisition of a material interest in Golden Eagle, a high-quality, low-cost UK North Sea development. Upon completion, this acquisition will add immediate material production and cash flow to EnQuest and will allow us to accelerate use of our substantial tax losses. It also demonstrates our continued commitment to the UK North Sea and diversifies our existing production base.