EnQuest (ENQ) shares fell 5 per cent on the release of the oil company's half-year results, despite a surge in production, strong hedging and a drop in operating expenditure to just $23 (£17) per barrel. The latter metric beat management expectations, but is expected to marginally increase in the second half of 2016 following two well interventions in August.
That drilling meant production from the Alma/Gaila wells stood at 18,785 barrels of oil per day (boepd) at the end of last month, although full-year production is now expected to be at the lower end of previous guidance at an average 42,000-44,000 boepd. It is this fine balance between cash generation - up 119 per cent to $183m in the period - and falling capital expenditure that is clearly weighing on the market's view of EnQuest.