TIDMENQ
RNS Number : 2980Y
EnQuest PLC
12 May 2021
EnQuest PLC, 12 May 2021
Operations update
Full year 2021 guidance remains unchanged
EnQuest Chief Executive, Amjad Bseisu, said :
"EnQuest remains on track to deliver against its targets.
Performance at Kraken has been strong, with the FPSO continuing to
perform well, and production at PM8/Seligi has improved following
the completion of initial restoration activities ahead of schedule.
While Magnus performance has been below expectations, we have a
number of activities planned for the rest of the year to optimise
production.
"We have continued to pursue opportunities to enhance our
portfolio with our agreements to acquire the Golden Eagle and
Bentley assets. Golden Eagle will add immediate material
production, reserves and cash flow to the Group, while Bentley
offers further long-term potential development opportunities and
other synergies to add to those at Bressay.
"The various workstreams in relation to the Golden Eagle
acquisition continue on track and operationally we are focused on
improving production across our portfolio."
Operating performance
-- Average net Group production in the four months to end April
2021 was 46,158 Boepd, within the Group's full year 2021 guidance
range which remains unchanged at between 46,000 and 52,000 Boepd
(net)
-- Strong production at Kraken and PM8/Seligi reflects high
production efficiency at both assets and the acceleration of well
restoration activities at PM8/Seligi
-- Production at Magnus has been lower than expected reflecting
power and third-party outages and slower execution of the well
intervention program
-- Multiple production adding projects across our assets
continue to be developed and implemented, underpinning full year
guidance
Effective liquidity management
-- Hedged c.9.0 MMbbls of oil for 2021 with an average floor
price of c.$59/bbl and an average ceiling price of $68/bbl
-- Refinancing of the senior credit facility as part of the
proposed Golden Eagle acquisition is on track
No change to guidance
-- 2021 average net Group production is expected to be between
46,000 Boepd and 52,000 Boepd; Kraken gross production is expected
to be between 30,000 Bopd and 35,000 Bopd (21,150 Bopd to 24,675
Bopd net)
-- Operating expenditure is expected to be approximately $265 million
-- Combined cash capital and abandonment expenditure is expected
to be approximately $120 million
-- Signed agreement to acquire non-operating interest in Golden
Eagle; expected to complete around the end of the third quarter
-- Signed agreement to purchase the Bentley discovery
Production details
Average daily production 1 Jan 2021 1 Jan 2020
on a net working to to
interest basis 30 Apr 2021 30 Apr 2020
(Boepd)
-------------------------- ------------- -------------
(Boepd) (Boepd)
UK Upstream
- Magnus 14,250 18,330
- Kraken 22,689 26,871
- Other Upstream
(1) 4,080 8,047
UK Upstream 41,019 53,238
UK Decommissioning
(2) 508 4,111
------------- -------------
Total UK 41,527 57,359
------------- -------------
Total Malaysia 4,631 8,579
------------- -------------
Total EnQuest 46,158 65,938
------------- -------------
(1) Other Upstream: Scolty/Crathes, Greater Kittiwake Area and
Alba
(2) UK Decommissioning: Heather/Broom, Thistle/Deveron, the
Dons, Alma/Galia
Magnus
Average production for the first four months of 2021 was 14,250
Boepd, reflecting an unplanned third-party outage and power related
failures in the first quarter, which have been rectified, and
slower execution of the well intervention program. The Group
remains focused on improving production through a well intervention
programme, increased water injection and facility optimisation.
Kraken
During the first four months of 2021, average gross production
was 32,183 Bopd, in line with 2021 full year guidance of between
30,000 and 35,000 Bopd (21,150 and 24,675 Bopd net). The floating,
production, storage and offloading vessel continues to perform
well, with production efficiency of 86% and water injection
efficiency of 89%. A tether was successfully replaced in March,
with the field shut in for approximately three days. Subsurface and
well performance remains good, with aggregate water cut stable.
Other upstream assets
Production for the first four months of 2021 averaged 4,080
Boepd, in line with expectations. This was driven by good
performance from Scolty/Crathes, reflecting the positive impact of
compression uptime and gas lift, partially offset by lower
production at the Greater Kittiwake Area, primarily as a result of
a failure of an umbilical providing power to the Mallard and
Gadwall wells impacting production. Reinstatement of power is
expected in the third quarter of 2021.
Alba continues to perform broadly in line with Group
expectations.
Midstream(1)
The Sullom Voe Terminal and its related infrastructure continues
to maintain safe and reliable performance, with 100% export service
availability during the first four months of 2021.
(1) Includes the Sullom Voe Terminal and Pipelines
UK Decommissioning
Average production of 508 Boepd was lower than in 2020,
primarily reflecting the cessation of production at Alma/Galia in
June 2020 and the Dons in the first quarter of 2021, which together
contributed c.4,000 Boepd during the first four months of 2020. In
April, the Northern Producer Floating Production Facility departed
the Dons and was handed back to its owners.
Malaysian operations
For the first four months of 2021, average production in
Malaysia was 4,631 Boepd. Production has been better than expected
as a result of the acceleration of initial production recovery
activities following the riser detachment in late 2020. The Group
anticipates replacement of the pipeline and riser around the end of
the third quarter.
Business development
In February, the Group signed an agreement with Suncor to
purchase Suncor's entire 26.69% non-operated equity interest in the
Golden Eagle area, comprising the producing Golden Eagle, Peregrine
and Solitaire fields for an initial consideration of $325 million.
Upon completion, expected to complete around the end of the third
quarter, the agreement will add immediate incremental production of
c.10 kboepd(1) , c.18 MMbbls to net 2P reserves(1) and c.5MMbbls to
net 2C resources(1) , in addition to providing significant medium
term development potential and value enhancement.
In April, a share purchase agreement was signed with Whalsay
Energy to purchase its entire 100.00% equity interest in the P1078
licence containing the proven Bentley heavy-oil discovery. The
agreement is subject to a number of conditions precedent, including
regulatory approval of the licence extension. This discovery is
within c.15 kilometres of the Group's existing Kraken and Bressay
operated interests, offering further long-term potential
development opportunities and other synergies.
The Group also signed an agreement with Anasuria Hibiscus to
farm-down an 85% working interest in, and transfer operatorship of,
the Eagle discovery located in the UK North Sea. EnQuest will
retain a 15% non-operating working interest.
(1) EnQuest estimates
COVID-19 Update
The health, safety and wellbeing of our employees is our top
priority. The Group remains compliant with UK, Malaysia and Dubai
government and industry policy. The Group continues to work with a
variety of stakeholders to ensure its operational response and
advice to its workforce is appropriate and commensurate with the
prevailing expert advice and level of risk. The Group's day-to-day
operations continue without being materially affected by
COVID-19.
2021 outlook (based on the Group's existing portfolio)
The Group remains on track with net production expected to be
between 46,000 and 52,000 Boepd, with a number of production
enhancing projects planned at several of the Group's assets through
2021, including the pipeline and riser re-instatement at PM8/Seligi
in the second half of the year.
Operating expenditures are expected to be approximately $265
million and combined cash capital and abandonment expenditure is
expected to be around $120 million.
EnQuest has hedged a total of c.9.0 MMbbls for 2021
predominantly using costless collars, with an average floor price
of c.$59/bbl and an average ceiling price of c.$68/bbl. As at the
end of April, c.6.2 MMbbls of production has been hedged with an
average floor price of c.$63/bbl and an average ceiling price of
c.$72/bbl.
EnQuest expects to announce its 2021 half year results on 2
September 2021.
Ends
For further information please contact:
EnQuest PLC Tel: +44 (0)20 7925
4900
Amjad Bseisu (Chief Executive)
Jonathan Swinney (Chief Financial Officer)
Ian Wood (Head of Communications & Investor
Relations)
Jonathan Edwards (Senior Investor Relations
& Communications Manager)
Tulchan Communications Tel: +44 (0)20 7353
4200
Martin Robinson
Martin Pengelley
Harry Cameron
Notes to editors
ENQUEST
EnQuest is providing creative solutions through the energy
transition. As an independent production and development company
with operations in the UK North Sea and Malaysia, the Group's
strategic vision is to be the operator of choice for maturing and
underdeveloped hydrocarbon assets by focusing on operational
excellence, differential capability, value enhancement and
financial discipline.
EnQuest PLC trades on both the London Stock Exchange and the
NASDAQ OMX Stockholm.
Please visit our website www.enquest.com for more information on
our global operations.
Forward-looking statements: This announcement may contain
certain forward-looking statements with respect to EnQuest's
expectations and plans, strategy, management's objectives, future
performance, production, reserves, costs, revenues and other trend
information. These statements and forecasts involve risk and
uncertainty because they relate to events and depend upon
circumstances that may occur in the future. There are a number of
factors which could cause actual results or developments to differ
materially from those expressed or implied by these forward-looking
statements and forecasts. The statements have been made with
reference to forecast price changes, economic conditions and the
current regulatory environment. Nothing in this announcement should
be construed as a profit forecast. Past share performance cannot be
relied upon as a guide to future performance.
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