Scotland business

North Sea producer EnQuest sees losses double

Kittiwake platform 2 Image copyright Enquest
Image caption Enquest is one of the largest independent producers operating in the UK North Sea

Oil firm EnQuest saw its pre-tax losses more than double last year after taking a hit from the oil price slump.

The Aberdeen-based company, which is one of the largest independent producers operating in the UK North Sea, reported a loss of about $1.3bn (£930m), compared with a loss of $579m in 2014.

Its results for 2015 included $626.2m of impairments to oil and gas assets.

Revenue was down by more than 10% to $906.6m.

EnQuest said the decrease was due to the lower oil price.

The average realised price per barrel of oil sold was just over $50 for the year ending 31 December, compared with about $100 it received in 2014.

Cutting costs

EnQuest reported that the fall in revenue was offset partially by higher production.

Last year, it achieved average production of 36,567 barrels per day, a 31% year-on-year increase. Output was boosted by contributions from the newly-producing Alma/Galia field in the North Sea, and from Malaysia, which now accounts for 25% of total production.

EnQuest said the Kraken field, which lies east of Shetland, remained on schedule to go onstream in the first half of next year.

Image copyright ENQUEST
Image caption Last year EnQuest boosted average production to 36,567 barrels per day, a 31% year-on-year increase

The company has been cutting costs across its operations, in response to the oil price slump.

Having made $300m in savings on its Kraken project, it has found a further cut of $125m in capital expenditure on the field, following a revision of the development plan.

The company saw its net debt rise sharply last year, from $967m at the end of 2014 to $1.55bn.

EnQuest said it was performing well at the start of 2016 and its focus on "operational efficiencies" had continued to reduce unit operating costs.

Its average production guidance for the full year is between 44,000 and 48,000 barrels per day.

Chief executive Amjad Bseisu said: "EnQuest continues to focus on its strategic priorities in this low oil price environment: strengthening the balance sheet, delivering on production and execution targets and streamlining operations.

"Significant reductions in both capex (capital expenditure) and opex (operating expenses) have been achieved, in conjunction with continued excellent operational performance, enabling us to produce positive operational cashflows at current oil prices."

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