Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

EnQuest downgraded by Barclays amid concerns over complexity

Barclays set a new price target of 45p, down from 60p, which compares to a market price of 36.85p
oil and gas operations
Barclays says the recent rights issue was a 'necessary step'

EnQuest PLC (LON:ENQ) has been downgraded by analysts at Barclays, which no longer takes a positive view of what is described as an ‘overly complicated’ business.

Barclays described the North Sea oil firm’s recent £107mln rights issue as a “necessary step” in addressing near-term debt repayments and the Magnus acquisition payment.

READ: EnQuest buys rest of Magnus fields from BP

“However, the fact that it was necessary despite our prior estimates indicating otherwise highlights the sub-optimal nature of EnQuest's disclosures around what has become a complex operating and financial structure,” Barclays analysts said.

“Simplistically, EnQuest is a debt-levered North Sea oil producer that should be quickly paying down debt in the current macro environment.

“In reality, we forecast end-18E net debt being flat year-on-year at c$2.0bn as annual EBITDAX growth of c160% fails to translate into free cash flow.”

Barclays set a new price target of 45p, down from 60p, which compares to a market price of 36.85p.

“With other oil-levered producers appearing more attractive in our view, we downgrade the stock to ‘equal weight’ from ‘overweight’,” Barclays added.

View full ENQ profile View Profile

Enquest Plc Timeline

Related Articles

Greenland Minerals' project on a map
October 30 2018
The company is spearheading a campaign to reduce capital costs for its flagship project.
oil and gas operations
September 05 2018
New exploration efforts are coming into the spotlight over the coming months as conventional drilling is slated for 2019
oil well in Alberta
Thu
The company has cash-generating oil and gas operations with exploration upside.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use