EnQuest expects significant production growth in 2018

In a trading update a month ahead of its full-year financials, EnQuest advised that its barrels of oil equivalent per day production levels had been in line with guidance at 37,405 as the on-schedule and under-budget delivery of first oil from its Kraken field had provided it with a significant boost throughout the second half.

EnQuest said it expected operating expenses to be in the vicinity of $350m, or $25.5 per barrel, while capital expenditure was anticipated to be around $370m, beating its previous guidance.

For this year, the company expects group production to grow by between 33% and 55%, upping its target rate to between 50,000 and 58,000 barrels of oil equivalent per day.

Chief executive Amjad Bseisu said: "2017 was a transformational year for EnQuest. Delivering the Kraken project on schedule and below budget was a huge achievement. As one of the largest developments in the North Sea in recent years, it demonstrated EnQuest's ability to deliver complex projects, while the acquisition of the Magnus oil field and Sullom Voe Oil Terminal provides further opportunities for us to apply our cost-focused life extension capabilities and for growth.

"Performance at Kraken continues to improve, and along with the full year impact of Magnus underpins our expectations for material production growth in 2018. The resulting increase in operating cash flow combined with lower capital expenditure will enable us to begin reducing our debt."

At 0920 GMT, the shares were up 8.8% to 31.55p.