EnQuest has today announces financial and operating results for 2024 Half Year.

EnQuest Chief Executive, Amjad Bseisu, said:
“EnQuest has continued to deliver strong uptime performance across our portfolio in the first half of the year, with production to the end of June averaging 42.8 Kboepd. With positive free cash flow generation and the cash completion of the Bressay farm down deal, the Group has continued to delever its Balance Sheet, with EnQuest net debt reduced to $321 million at 30 June. We have a significant work programme in the second half of the year, including drilling at Magnus, continued capital investment in Malaysia and decommisioning at Heather and Thistle. We remain on track to plug and abandon 60% of our suspended & shut-in wells across the portfolio by the end of 2024. At the Sullom Voe Terminal, we are progressing the transformative New Stabilisation Facility project and, through Veri Energy, we continue to advance our new energy and decarbonisation projects.

“We are disappointed with the ongoing application of the Energy Profits Levy despite operating in an environment where no windfall conditions exist. The current fiscal regime is causing irreversible damage to an indigenous and strategically important UK industry. The UK energy industry needs a progressive tax regime that recognises the maturity of the North Sea and re-establishes the UK as a globally competitive investment basin. The oil and gas sector is the key to a Just Energy Transition, protecting the skills, jobs and resources required to deliver the decarbonisation projects of the future and, with stability and the right fiscal stimulus, can deliver material UK economic growth through billions of pounds of investment-ready projects. EnQuest has to date invested over £4 billion in the UK and has the capacity and opportunities to do so again.

“The Group’s growth strategy remains robust, with a focus on delivering a transformative UK acquisition; utilising our differentiated operating capability and significant tax asset to deliver material incremental value. Given the prevailing tax regime, we are targeting UK portfolios with limited capital reinvestment programmes. Internationally, we are working on a number of growth opportunities in South East Asia where the return on capital investment is compelling. The work we have done over the past seven years to strengthen our balance sheet gives us choices, and we will continue to make value-adding strategic decisions for our shareholders.”

H1 2024 performance

• Reported cash generated from operations was $368.9 million (2023: $370.4 million); with cash capital expenditure of $95.0 million (2023: $80.0 million) and cash abandonment expenditure of $31.5 million (2023: $29.3 million).
  • Net production averaged 42,771 Boepd (2023: 45,480 Boepd); strong uptime across the portfolio offset by minor delays to the Magnus five-yearly rig recertification programme and the failure of an infill well on the non-operated Golden Eagle asset.
  • Revenue and other operating income totalled $586.0 million (2023: $770.4 million). Oil revenue was largely flat ($523.1 million; 2023: $540.1 million). Gas revenue fell on lower prices and reduced third party volumes transported over Magnus – the impact of which was offset in cost of sales.
• Reported profit after tax was $30.3 million (2023: loss of $21.2 million).
• EnQuest net debt was reduced by $159.9 million, to $321.0 million at 30 June 2024. The Group fully repaid its RBL and EnQuest maintained strong liquidity - with total cash and available facilities of $566.0 million (end 2023: $498.8 million).
  • EnQuest’s net debt to EBITDA ratio at 30 June was 0.4x – moving beyond the Group’s stated leverage target of 0.5x.
• This provides a platform for transformational transactional growth, enhanced by the Group’s advantaged UK tax position.
• EnQuest’s $15 million share buy back programme commenced in April, with share purchases totalling c.$2.5 million at 30 June 2024. Planned Treasury repurchases were completed in August - all additional shares purchased will now be cancelled.

2024 guidance and outlook

The Group remains on track to deliver net production within the guidance range of 41,000 to 45,000 Boepd set at the start of the year. In H1 2024 the Magnus five yearly rig recertification was completed successfully but a minor delay and remedial works meant Magnus drilling and well interventions recommenced later than planned. This, and the previously reported failure of an infill well on the non-operated Golden Eagle field, mean full year production is now expected to be in the lower half of the guided range.

Full year expectations for operating, cash capital and abandonment expenditures remain unchanged from the Group’s original guidance at c. $415 million, $200 million and $70 million, respectively.

For the period July to December 2024, the Group has hedged c.5.4 MMbbls of production through 4.6 MMbbls of put options with a floor price of $60/bbl and 0.8 MMbbls of swaps at c.$87/bbl. The Group has hedged a total of c.1.6 MMbbls in 2025 through the use of put options, all with the same floor of $60/bbl.

EnQuest’s business development team is very active as the Group looks to deliver transformative growth and will remain disciplined to ensure shareholder value.

KeyFacts Energy: EnQuest Malsysia country profile   l   KeyFacts Energy: EnQuest UK country profile