EnQuest confirms production guidance despite first-half loss

(Sharecast News) - North Sea oil producer EnQuest insisted it remained on track to meet full-year production guidance on Wednesday, despite a fall in output in the first half. Production fell 10.6% to 38,257 barrels of oil equivalent per day (boepd) in the six months to 30 June, while the realised oil price weakened 14.9% to $71 per barrel.

Output was dented by a third-party infrastructure outage, which hit its Magnus platform, north east of Shetland, for nearly five weeks.

It total, the outage was responsible for lowering production by around 3,500 barrels per day.

However, looking to the full year and EnQuest said it remained on track to deliver net production within the guidance range of 40,000 to 45,000 boepd, after it used the shut-in to accelerate maintenance work.

As a result, the next planned shut down at the field is now not scheduled until 2026.

Amjad Bseisu, chief executive, said: "EnQuest'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."

Interim revenues and other operating income, meanwhile, fell 6% at $549.1m as cost of sales rose 10%.

The loss after tax came in at $173.5m, compared to a profit of $30.3m, after EnQuest took a $123.9m non-cash adjustment related to windfall taxes.

The UK's levies on oil and gas profits means North Sea operators like EnQuest are now paying some of the highest taxes in the world.

Bseisu said: "We remain very clear that we are committed to continued investment in our UK business, targeting material, value-enhancing growth.

"Our near-term pivot to investment outside of the UK underlines, however, how successive UK governments have made the North Sea globally uncompetitive through fiscal policy.

"The UK remains the only country worldwide levying a windfall tax on energy profits, in an environment where...prices are at, or below, historic norms and therefore no windfall exists."

As at 1000 BST, shares in EnQuest were down 2% at 11.54p.