EnQuest release 2020 Half year results

EnQuest release 2020 Half year results

Revenue was $450.7 million for the six months ended 30 June 2020 compared with $858.2 million for the same period in 2019.

Group net production averaged 66,055 Boepd in the six months to end June 2020; full year production guidance range of 57,000 Boepd to 63,000 Boepd maintained, although currently expect to be towards the upper part of this range
Operations materially unaffected by COVID-19

Strong performance on Kraken with gross production of 38,967 Bopd (net 27,472 Bopd), c.19% higher than the same period in the prior year. Full year production is expected to be towards the upper part of the 30,000 Bopd to 35,000 Bopd (gross) guidance range

Revenue of $450.7 million (2019: $858.2 million) and EBITDA of $274.9 million (2019: $525.9 million), reflecting strong production volumes and the benefit of the Group’s hedging programme, partially offset by lower market prices

Operating expenditure decreased to $174.3 million (2019: $248.4 million) with unit operating costs reduced to $14.4/Boe (2019: $20.1/Boe), reflecting strong production and cost control

Robust cash generated from operations at $283.2 million (2019: $426.2 million); cash capital expenditure of $101.4 million (2019: $124.6 million), with full year guidance of c.$120 million unchanged

Free cash flow generation of $87.5 million (2019: $138.3 million) has enabled further debt reduction

Lower oil price assumptions resulted in non-cash post-tax impairments of $251.6 million, and non-cash de-recognition of undiscounted deferred tax assets of $432.6 million. EnQuest retains access to its tax losses and allowances
End June net debt reduced by $61.9 million from year end

At 30 June 2020, net debt was reduced to $1,351.1 million (end 2019: $1,413.0 million) with cash and available bank facilities amounting to $269.5 million (end 2019: $288.6 million)

Tanjong Baram Project Finance Facility of $31.7 million fully repaid in June; Sculptor Capital Facility reduced by $31.8 million in the period to end June

For full year 2020, the Group’s hedge programme covers c.11.4 MMbbls. Approximately 10.3 MMbbls are hedged at an average floor price of $43/bbl, with a further 1.1 MMbbls hedged with an average floor price of c.$52/bbl in accordance with the Sculptor Capital facility agreement

Significant, low-cost 2C resource addition in the UK North Sea

Signed sale and purchase agreement for 40.81% equity interest in and operatorship of Bressay licences in July
Low-cost addition of up to 115 MMbbls (net) 2C resources; opportunity for long-term, low-risk, phased sub-sea tie-back project

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