EnQuest (LON:ENQ), the North Sea operator with assets off the coast of Malaysia, reported a strong operational performance, but was hit by the sharp fall in the oil price.
Daily production during the six months to June rose by more than 17% to 29,665 barrels of oil equivalent a day – and will rise to between 33-36,000 for the remainder of 2015.
Yet underlying earnings (EBITDA) were almost halved in the period to US$226.7mln from US$440mln for the corresponding period last year.
EnQuest said its belt-tightening programme was ongoing and it is now at a point where it costs US$38 to produce a barrel of crude. That figures should be in “low $30s” next year.
"As the current capital programme reduces over the next two years and EnQuest benefits from lower cost operations and higher production, we expect to move into positive free cashflow at prevailing oil prices," said chief executive Amjad Bseisu.
Echoing the comments of partner Cairn Energy yesterday, EnQuest said the giant Kraken North Sea discovery is on budget and should deliver first oil in 2017.