EnQuest reaffirms production guidance despite unplanned Kraken shutdown

British oil and gas firm EnQuest reaffirmed its full-year production guidance on Thursday after seeing flow rates increase almost 50% throughout the first four months of the year.

EnQuest saw an average production rate of 56,077 barrels of oil per day in the four months leading to 30 April, up 48.1% year-on-year, leading the group to double down on its assumption of 50,000 to 58,000 boepd in 2018.

The group's flagship Kraken FPSO "performed well" during three major storms, although extreme cold weather in early March resulted in operations being temporarily shut down, allowing EnQuest time to undertake much of its previously planned April shutdown maintenance.

EnQuest expects material net production growth despite planned maintenance shutdowns at a number of its fields scheduled over the summer.

Drilling programmes at its Magnus and PM8/Seligi assets, along with a workover programme at Alma/Galia, were expected to deliver production improvements "later in the year", with the DC4 programme at Kraken expected to come into production in 2019.

The London-based firm had cash and available bank facilities of $204.8m as of 30 April.

EnQuest's chief executive, Amjad Bseisu, said, "Production performance has been in line with expectations, underpinning our confidence in delivering a material increase in production in 2018. At the same time, we are on track to deliver on our cost and capital expenditure targets. The improving cash flow generating capacity of the group is enabling early cancellation of $50m of bank debt and we remain on plan for a further reduction in debt during the year."

As of 1410 BST, EnQuest shares had dropped 8.03% to 38.67p.