Buoyant oil prices have enabled independent oil & gas explorer EnQuest to beat analysts' estimates, not to mention produce a stunning $656m (£411m) of operating cash flow. This, in turn, resulted in a nine-fold increase in the net cash position to a hefty $379m at the year-end. Combined this with the recently announced North Sea fiscal incentives and the backdrop for this year's planned $1bn of investment in at least 11 exploration and appraisal wells could hardly be any better.
EnQuest's realised oil price rose by a third to $107.60 a barrel, which the company successfully managed to exploit by raising daily output to 23,698 barrels of oil equivalent (boe) – a 12 per cent rise on 2010. Though this year's output is likely to be static as a result of natural well decline, by 2014 daily output should reach in excess of 40,000 boe.
Moreover, EnQuest increased its proven and probable reserves 30 per cent to 115m boe, primarily due to success at Alma/Galia. Those fields will account for half of this year's capital expenditure, which should be entirely self-funded from annual operational cash flow of around $759m and net cash, according to analysts at BoA/Merrill Lynch. Enquest also announced a $900m new credit facility alongside these results.
| ENQUEST (ENQ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 129p | MARKET VALUE: | £1.04bn | |
| TOUCH: | 129-130p | 12-MONTH HIGH: | 144p | LOW: 84p |
| DIVIDEND YIELD: | nil | PE RATIO: | 27 | |
| NET ASSET VALUE: | 116¢* | NET CASH: | $379m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 234 | 11 | 1.90 | nil |
| 2010 | 583 | 56 | 4.00 | nil |
| 2011 | 936 | 363 | 7.60 | nil |
| % change | +60 | +551 | +90 | - |
*Includes intangible assets of $132m, or 16.5¢ a share £1:$1.60 | ||||
