RE: News16 Oct 2025 12:01
I'm a long term holder here but have topped up today while we sit around a 5 year low, based on the following:
Everyone is welcome to pick holes in this! If Brent crude averages around a modest £52 per barrel in 2030, EnQuest could generate around £520 million in post-tax profit, spread across three key regions. 2030 doesn't feel very far away to me.
In the UK, with expected production of 30,000 barrels per day, EnQuest would generate strong pre-tax cash flow—but the punishing 78% tax rate would slash post-tax profit to around £84 million. That’s a stark reminder of how the Energy Profits Levy distorts returns, even when prices aren’t at windfall levels. Of course, this may change on Budget day.
Malaysia, producing 20,000 barrels a day, benefits from lean operating costs and a much friendlier 25% tax regime. It could deliver around £247 million in post-tax profit—making it the stealth cash engine of the portfolio.
Indonesia, where EnQuest is targeting 35,000 barrels a day via its 40% PSC stake, could contribute around £189 million in post-tax profit. That’s assuming moderate costs and a 30% tax rate. If the Gaea blocks deliver, this could be a game-changer.
So while the UK remains a solid base, it’s Malaysia and Indonesia that offer margin, resilience, and growth. Total post-tax profit in this scenario: ~£520 million. If oil prices rise or Veri Energy lands a major contract, the upside could be even greater.
The dividend is also approximately 5% at these levels. I'm actually excited to be buying this share today. Recent, all be it, small director buys also give me confidence.