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EnQuest downgrades production guidance as it decides to leave Heather and Thistle fields offline

“Given the prevailing low oil price environment, we are taking decisive action to reduce operating and capital expenditure in 2020 and beyond," said chief executive Amjad Bseisu.

Enquest Plc - EnQuest downgrades production guidance as it decides to leave Heather and Thistle fields offline

EnQuest Plc (LON:ENQ) has announced it will now restart production from the Heather and Thistle/Deveron fields, which accounted for around 6,000 barrels oil equivalent per day last year, as it responds to falling oil prices.

The Thistle and Heather operations were shutdown in the fourth quarter and were due for maintenance.

In an operations update EnQuest noted that it is implementing a programme of cost savings and spending cutbacks, as it aims to bring its break-even threshold down to US$38 per barrel in 2020 and US$35 per barrel in 2021.

READ: Crude market rout hammers London's oil stocks

EnQuest described production in the year to date as “good”, averaging 65,500 barrels oil equivalent per day.

Nonetheless, the group’s net production guidance was downgraded to 57,000 to 63,000 boepd for 2020

The company highlighting that the 70% owned Kraken field was producing ahead of expectations, yielding 39,000 gross, and, that it is still expected to produce an average between 30,000 to 35,000 boepd for the year.

"Over the last few years, EnQuest has made significant progress in strengthening the business with our three world-class assets in Kraken, Magnus and PM8/Seligi, and a materially reduced debt position,” said Amjad Bseisu, EnQuest chief executive.

“Given the prevailing low oil price environment, we are taking decisive action to reduce operating and capital expenditure in 2020 and beyond, with a view to targeting cash flow breakeven of c.$35/Boe in 2021.

“While these actions have reduced our production expectations, free cash flow has improved and with no senior credit facility amortisations due in 2020 and long-dated bond maturities, we are positioning ourselves to manage through the current low oil price environment."

Quick facts: Enquest Plc

Price: 12.6 GBX

AIM:ENQ
Market: AIM
Market Cap: £214.43 m
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