EnQuest reports 'robust' first half despite low oil price

EnQuest posted its results for the six months to 30 June on Thursday, with strong production growth of 43% year-on-year to 42,520 barrels of oil equivalent per day.

The London-listed firm said it is delivering against its strategic priorities in the continuing low oil price environment, with further action to reduce opex and capex accompanied by “sustained strength” in operations.

It said high production efficiency drove its highest H1 levels of production, with a well implemented drilling programme and with first oil from the Kraken development on schedule for H1 2017.

During the period, UK production grew by 22%, before inclusion of production from the new Alma/Galia development, with Malaysian production also up by over 20%.

Alma/Galia delivered an average net production of 6,433 Boepd in H1 2016.

With the extended period of production build up for Alma/Galia, full year 2016 production guidance was now anticipated to be in the range of between 42,000 and 44,000 Boepd, around the lower end of previous guidance, at the mid-point representing strong growth of 18% over 2015.

Revenue for the period reached $391.3m and EBITDA was $242.9m, compared to $444m and $226.7m a year ago, respectively.

The $182.6 million of cash generated from operations was 119% up on H1 2015..

“”EnQuest is progressing both of its development projects ahead of budget; the Kraken FPSO is on track for sail away in H2 2016, with its full cycle gross capex costs now reduced by a further $150m to $2.6bn,” said EnQuest CEO Amjad Bseisu.

“The Scolty/Crathes development is ahead of schedule.

“This year's drilling programme has been executed very efficiently, delivering more wells within the original budget.”

Bseisu said that with “very substantial” structural reductions in the company’s cost base already delivered, the long term potential of EnQuest's business model remains compelling.

“EnQuest's overriding priority continues to be delivering a business which is robust in this challenging environment.”