Oil exploration firm EnQuest in financial restructuring move
Oil firm EnQuest has announced a major financial restructuring move to help it deliver first oil from its Kraken development in the North Sea next year.
It is seeking to strengthen its balance sheet by raising up to £82m through an equity placing.
The group, which has bases in London and Aberdeen, has also agreed "improvements" on the terms of its debt facilities.
It said the moves would "significantly improve" its liquidity position.
EnQuest has struggled with the decline of oil prices since 2014, reporting that "the continuing challenging oil price environment" had had a significant negative impact on its revenues, liquidity and available cash resources.
Its debts rose from $1.55bn at the end of last year to $1.68bn at the end of June.
Kraken, which is located about 125km (77 miles) east of the Shetland Islands, is due to come on-stream in the first half of 2017. It is one of the biggest new projects in UK waters.
The cost of getting it to production has been put at $2.6bn, down by $575m on the original estimate, as EnQuest has driven down supplier costs.
In September, EnQuest ended talks to sell a 20% stake in the Kraken field to Israeli conglomerate Delek Group.
EnQuest chairman Jock Lennox said: "We are very pleased to announce today a comprehensive package of measures to place EnQuest on a strong footing to deliver our Kraken development in H1 (first half) 2017 and ensure that we are well placed to deliver value to our shareholders in the medium term.
"Over the last two years, EnQuest has taken action to implement extensive cost-saving programmes to refocus the business for the low oil price environment, including reducing and re-phasing both capital and operating expenditures.
"Simultaneously, EnQuest has been working on a range of other funding and liquidity options, which culminate in the restructuring announced today."