EnQuest PLC - Operations update
Strong production supports full year 2020 guidance with forecast free cash flow1 breakeven unchanged at c.
Strong production performance
§ Group production averaged 65,938 Boepd in the four months to end
§ Group performance remains materially unaffected by COVID-19
§ Kraken average gross production of c.38,000 Bopd, up c.36% year on year reflecting improved FPSO performance and continued strong reservoir and well performance
§ Better than expected performance from Scolty/Crathes
§ Magnus wells completed and onstream in March
Effective liquidity management
§ No senior credit facility amortisations due in 2020
§ For the full year,
On track to deliver in 2020 and beyond
§ Implementation of 2020 cost savings on track; forecast free cash flow1 breakeven remains unchanged at c.
§ Continue to target free cash flow breakeven of c.
1 Free cash flow: net change in cash and cash equivalents less net (repayments)/proceeds from loan facilities. $/Boe based on working interest production
"Our continued focus on operational excellence has ensured our operations remain materially unaffected by the ongoing COVID-19 pandemic. Performance at Kraken and Scolty/Crathes has been ahead of expectations, while production at Magnus and PM8/Seligi has also been good, with the two new wells drilled on Magnus coming onstream in March.
"We also took decisive, early action to reduce costs and the implementation of our cost reduction programme is progressing well.
"With the strong performance in the year to date and continued focus on delivering our cost programme, we expect that for the remainder of the year we need to realise an average oil price of around
Net daily average production on a working interest basis
1 Jan' 2020 to
1 Jan' 2019 to
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Production in the four months to end April averaged 21,106 Boepd, 39% lower than the same period in 2019. This decrease was primarily driven by the decision not to restart production at the Heather/Broom and Thistle/Deveron fields, which contributed c.9,000 Boepd in the same period in 2019. Magnus production was impacted by gas compressor performance, although this was partially offset by good production efficiency. The two new Magnus wells came onstream in late March and are performing in line with expectations. Production at the Dons was lower as a result of lower water injection, gas compression downtime and underlying natural declines. At the
Work continues on the redundant crude oil storage tanks at Thistle, with removal expected to be completed later this year. The process of securing regulatory approvals for the cessation of production for the Heather/Broom and Thistle/ Deveron fields is underway; once approved, these assets will be classed as being in the decommissioning phase.
Average production in the four months to end
Preparation for decommissioning continues at Alma/Galia ahead of the expected cessation of production in the third quarter.
Gross production during the first four months of 2020 averaged 38,115 Bopd, above the top end of guidance. The FPSO vessel continues to perform well, with production efficiency remaining high at above 80%. Subsurface and well performance continues to be strong, with the aggregate water cut remaining stable. Drilling at
Average production in
Liquidity and net debt
No further amortisation payments on the senior credit facility are due in 2020.
For the full year,
As a responsible operator,
While it is difficult to forecast the impact of COVID-19, at the time of publication of
Board Committee changes
With effect from
The Group has made a positive start to the year with average production of 65,938 Boepd, above the top end of the full year 2020 guidance range. The planned maintenance shutdown at Kraken is now expected to take place over the summer, while drilling at
The Group reaffirms 2020 production guidance of between 57,000 and 63,000 Boepd.
As previously disclosed, the Group has taken decisive action to lower its cost base across the business, with significant reductions in its operating and capital expenditure and remains committed to targeting free cash flow breakeven of c.
Operating costs for 2020 remain unchanged at c.
Cash capital expenditure for 2020 remains around
For further information please contact:
Amjad Bseisu (Chief Executive)
Jonathan Swinney (Chief Financial Officer)
Ian Wood (Head of Communications and Investor Relations)
Jonathan Edwards (Senior Investor Relations and Communications Manager)
Tulchan Communications Tel: +44 (0)20 7353 4200
Notes to editors
EnQuest is an independent production and development company with operations in the
Forward-looking statements: This announcement may contain certain forward-looking statements with respect to EnQuest's expectations and plans, strategy, management's objectives, future performance, production, reserves, costs, revenues and other trend information. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Nothing in this announcement should be construed as a profit forecast. Past share performance cannot be relied upon as a guide to future performance.
This information is provided by RNS, the news service of the
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