EnQuest on track to deliver against FY targets

Exploration and production company EnQuest said on Monday that it remained on track to deliver against its full-year targets thanks to a "strong" performance at Kraken, with the FPSO continuing to operate with "top quartile uptime".

EnQuest said average net group production in the four months ended 30 April came to 50,361 barrels of oil per day, driven by "good production efficiency" across its portfolio as well work campaigns commenced its Magnus and PM8/Seligi programmes, with two wells returned to service and three workovers completed.

The London-listed group also noted it was able successfully to execute a new retail bond issue during the period, which extended £133.0m of its unsecured debt to 2027, with the firm continuing to explore options to refinance its high-yield bond ahead of maturity in October 2023.

Looking ahead, EnQuest reiterated its full-year guidance, with 2022 average net group production expected to be between 44,000 and 51,000 barrels of oil equivalent per day, with gross production from the Kraken FPSE expected to be between 22,000 and 26,000 barrels per day.

Full-year operating expenses were projected to be roughly $430.0m, while cash capital expenditure and and abandonment expenses were expected to be around $165.0m and $75.0m, respectively.

Chief executive Amjad Bseisu said: "EnQuest remains on track to deliver against its 2022 targets. Performance at Kraken has been strong, with the FPSO continuing to operate with top quartile uptime. Underlining EnQuest's long-term commitment to investing in the North Sea, our largest activity programme since 2014 is well underway. At Magnus, we have successfully restored production to two wells, completed a well intervention which has already achieved payback on investment, and are preparing to drill the first of three wells planned for 2022. In Malaysia, we have already completed three workovers at PM8/Seligi ahead of the planned four-well drilling programme, where the early results have been encouraging.

"Overall, our focus remains on continuing to reduce net debt while selectively investing in our low-cost, quick-payback well portfolio and existing infrastructure in order to sustain our production base. At the same time, we continue to be disciplined in our evaluation of organic and inorganic growth opportunities, including development of our new energy business in a capital light manner."

As of 1105 BST, Enquest shares were up 5.54% to 37.31p.

Reporting by Iain Gilbert at Sharecast.com