Lengthy pipeline shutdowns and tough comparisons with the year before have cut production by a fifth at EnQuest. Still, this year was always going to be about the second half, and a number of new wells mean the North Sea explorer should easily hits its full-year target of 20-24,000 barrels of oil equivalent per day (boepd).
EnQuest average output of 20,253 barrels a day over the six-month period would have been 1,200 higher but for maintenance work on the Ninian and Cormorant pipelines, although a 5 per cent increase in its realised average oil price softened the blow to revenue. A 36 per cent jump in production at the Thistle field did, too.
With another new well on the Don field, S11, now onstream and S10 to follow, EnQuest expects production of 23-28,000 barrels a day in 2013 and over 33,000 the following year, despite having just farmed out 35 per cent of the Alma/Galia development to the Kuwaitis. That deal will cut Enquest's capital expenditure this year by a fifth to $800m (£510m).
There should be further news on the Klidrummy discovery in the fourth quarter and results of the UK's 27th licensing round are due, probably in October. Expect further progress on Kraken in 2013 and first oil at Alma/Galia towards the end of next year. More acquisitions are also on the cards.
ENQUEST (ENQ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 115p | MARKET VALUE: | £923m | |
| TOUCH: | 114-115p | 12-MONTH HIGH: | 135p | Low: 84p |
| DIVIDEND YIELD: | nil | PE RATIO: | 9 | |
| NET ASSET VALUE: | 133¢* | NET CASH: | $92.6m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 511 | 206 | 2.8 | nil |
| 2012 | 440 | 185 | 15.8 | nil |
| % change | -14 | -10 | +464 | - |
£1=$1.57 *Includes intangible assets of $231m, or 29¢ a share | ||||
