EnQuest Swings To Loss With Decline In UK Oil Production

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LONDON (Alliance News) - North Sea-focused oil & gas explorer EnQuest PLC said on Thursday it swung to an interim loss, with drops in revenue and production for the first half of 2017, which it attributed to natural production declines.

For the six months to the end of June, EnQuest swung to a pretax loss of USD21.3 million from a profit of USD74.9 million, reflecting a one-off impairment of oil and gas assets of USD79.7 million.

Revenue for the group declined to USD342.4 million from USD382.2 million the prior year, as production fell substantially to an average of 34,015 barrels of oil equivalent per day from 42,520 barrels.

UK production decreased to an average of 28,045 barrels of oil equivalent per day from 33,087 barrels the year before, due to a reduced production from almost all of EnQuest's developments in the North Sea. Malaysia production also decreased to 8,969 barrels per day from 9,433 barrels.

EnQuest said first oil from the large Kraken development in the North Sea was delivered during the period on June 23, and the group is expecting plateau production for the first half of 2018 at 50,000 gross barrels of oil per day. With the first cargo load of oil expected to be lifted from the development in the next few days, Enquest said it has reduced its full cycle project capital expenditure to USD2.40 billion.

"EnQuest was pleased to bring the Kraken field onstream on June, with substantially reduced capex, assisted by the excellent delivery of the drilling and subsea programmes; we expect the first cargo load of oil to be lifted from the Kraken FPSO in the next few days. Kraken remains on course to achieve plateau production of approximately 50,000 barrels of oil equivalent per day gross in the first half of 2018, driving a material increase in EnQuest's production in 2018 and beyond," said Chief Executive Officer Amjad Bseisu.

"EnQuest expects to deliver the targeted reductions in capital expenditure post Kraken start up and to complete the Magnus/SVT acquisition before the year end. Deleveraging the balance sheet remains a key post Kraken start up objective," Bseisu added.

EnQuest agreed to buy a 25% stake in the Magnus oil field in the UK North Sea from BP PLC back in January for USD85.0 million.

Shares in EnQuest were down 1.4% at 24.66 pence on Thursday.

By Dayo Laniyan; [email protected]

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