Higher output and oil prices lift EnQuest profit

Oil and gas producer EnQuest (ENQ) watched its profits soar in the first half of 2011 on higher production and rallying oil prices.

The North Sea-focused company posted pre-tax profit of $215.2 million (£132.3 million) for the six months ended 30 June, up 145% on the same period of 2010, amid a 37% increase in the oil price.

Chief executive Amjad Bseisu said: "In the first half of 2011, EnQuest has again delivered a strong financial and operational performance.

"We have consolidated our positions by increasing our interest in the Broom field and in the Crawford block and by becoming the operator of Crawford. Across our asset base we have increased net reserves by approximately 11.5 million barrels of oil equivalent, the equivalent of 120% of our expected full year production."

Revenue rose 100% during the period as the company ramped up production to 25,210 barrels of oil equivalent per day (boepd) in the first half, compared with 18,708 boepd pro-forma in the first half of 2010.

The increase came about primarily on the back of improved output from the Don Southwest and West Don fields.

With its drilling programme on schedule, EnQuest said it was confident in meeting its 2011 full-year production target of 26,500 barrels of oil equivalent per day.

It added that it expects significant organic growth potential from the Alma and Crawford development projects alone.

On the exploration front, the FTSE 250-listed firm said it plans to drill a well in the third quarter on the Ivy prospect, followed by exploration wells on the Crathes and Moon prospects in the fourth quarter, as well as one on the Tudor Rose discovery.

"We continue to pursue actively external business development opportunities in the UKCS and also further afield. All of which underpins our confidence in EnQuest’s ability to sustain the delivery of our longer term growth objectives."

Shares in the company, which have lost about a fifth of their value over the last month, edged up just 0.3% to 108.25p despite the good news.