Enquest PLC (AIM:ENQ) said it has deferred drilling on one North Sea field in 2023 due to the windfall tax or energy profits levy (EPL) and is considering its UK strategy.
Amjad Bseisu, chief executive, said that due to the EPL, planned drilling at the Kraken field would be deferred though three infill wells at Magnus and three new wells at Golden Eagle will go ahead.
The offshore UK-focused oil and gas group slashed its debt last year as the soaring price of crude meant cash poured into the business.
Free cash flow in 2022 was a record at more than US$500mln and cutting net borrowings to US$700mln.
Even so, it said the EPL would have an effect on its “capital allocation strategy and our UK production growth ambitions”.
Bseisu has been a vocal critic of the windfall tax, describing its recent hike to 35% as “particularly disappointing”.
Enquest produced 47,259 barrels a day on average in 2022, some 6% up on 2021, with Kraken above expectations though the Magnus field was affected by workovers and Golden Eagle produced less than targeted.
Prices received during the year rose to US$103 per barrel on average pre-hedging and US$89 after.
For 2023, average net production is forecast to be between 42,000-46,000 barrels a day, with capital expenditure of US$160mln on a net basis.