EnQuest Plc (LON:ENQ) said its production performance continues to be “good”, and, day-to-day operations continue without being materially affected by coronavirus (covid-19).
In its financial results statement, however, the oil firm has made a US$562.3mln of non-cash post-tax impairments due to oil price and production profiles, plus a further US$149.6mln impairment to goodwill.
Production for 2019 amounted to 68,606 barrels oil equivalent per day, representing a 23.7% rise compared to the year before.
“During 2019, EnQuest again delivered on its targets,” said Amjad Bseisu, chief executive.
Revenue totalled US$1.71bn, up from US$1.2bn in 2018, and earnings (EBITDA) came in just above US$1bn compared to US$716.3mln in the year before. It ended 2019, with US$288.6mln of cash and available bank facilities, while net debt stood at US$1.41bn.
By the end of February, its cash balance was US$268.2mln and debt amounted to US$1.36bn.
EnQuest repeated production guidance of 57,000 to 63,000 boepd.
The company announced further operating cost cuts, totalling US$190mln, leaving revised full year guidance for opex at US$335mln. Additional capex savings of US$110mln, cutting guidance of US$120mln. Directors and senior management have agreed to reduce salary by 20%.
It said that free cash flow breakeven is pitched at US$33 per boe in 2020, and US$27 per boe in 2021.
“Given the prevailing low oil price environment, we have taken decisive action to lower our cost base, targeting US$190mln of operating cost savings in 2020, equating to unit operating expenses of c.US$15/Boe,” Bseisu said.
“With these significant cost reductions, cash flow breakeven is estimated at c.US$33/Boe in 2020.”
He added: “we are well positioned to manage through a sustained low oil price environment.”