TIDMENQ
RNS Number : 1627G
EnQuest PLC
25 May 2017
ENQUEST PLC, 25 May 2017. OPERATIONAL UPDATE.
Kraken on track and 2017 production guidance confirmed
Highlights
-- Kraken development on track to deliver first oil before the end of June 2017, with further excellent progress on
drilling.
-- EnQuest reaffirms its guidance for the full year 2017 of average production between 45,000 Boepd and 51,000 Boepd,
which reflects the Kraken contribution in H2 2017. Production averaged 37,856 Boepd for the four months to end
of April 2017, down on the 42,752 Boepd in the same period in 2016, reflecting natural declines in the existing
producing assets.
-- Magnus/SVT transition and acquisition programme on course for transaction completion around the end of 2017, with
no cash outlay for EnQuest.
EnQuest CEO Amjad Bseisu said:
"EnQuest is on track to achieve first oil from Kraken before the
end of June and to deliver on its production, unit opex and capex
targets for 2017. Our strategic priorities continue to be
increasing production by delivering on operational and development
execution, whilst also continuing to reduce the operating cost
base. First production from the Kraken development will give
EnQuest its seventh operated hub and will mark a turning point in
EnQuest's progress from a period of heavy investment to one focused
on cash generation and deleveraging the balance sheet.
EnQuest's proposed acquisition and operation of interests in the
Magnus oil field and the Sullom Voe Terminal is on schedule for
completion around the end of the year. This transaction recognises
EnQuest's differential operational capability in managing mature
assets and infrastructure, essential in the North Sea basin at this
point in its evolution. Magnus will be EnQuest's eighth operated
hub and provides the potential for significant future growth."
Production statistics
Production Net daily Net daily
on a working average average
interest basis 1 Jan' 1 Jan'
2017 to 2016 to
30 April 30 April
2017 2016
----------------- ---------- ----------
(Boepd) (Boepd)
Thistle/Deveron 7,230 9,314
Dons/Ythan 5,267 6,567
Heather/Broom 4,778 6,149
Kittiwake 2,869 3,678
Scolty/Crathes 3,941 -
Alma/Galia 3,452 5,594
Alba 1,310 1,101
---------- ----------
Total UKCS 28,846 32,403
---------- ----------
PM8/Seligi 8,024 9,003
Tanjong Baram 986 1,346
---------- ----------
Total Malaysia 9,010 10,349
Total EnQuest 37,856 42,752
---------- ----------
Performance update by individual production and development
asset
North Sea
Kraken development
All drilling is now complete on DC1 and DC2 and the rig has
moved to DC3, where further excellent progress has been made on the
drilling programme. Drilling performance to date has significantly
de-risked delivery of the project to and beyond first oil.
DC1 and DC2 subsea commissioning is complete and ready for
operation. The turret pipework and emergency shut down valves have
been installed. Nitrogen/helium leak testing has been successfully
conducted and the final rotation testing is complete. The boiler
systems are running well and the water injection and HSP power
pumps have been commissioned. Testing and other topsides and subsea
infrastructure final commissioning work is ongoing. Handover of
FPSO systems from commissioning to operations continues.
Longstanding discussions with Bumi continue in relation to the
remedies of Kraken partners for contractual infringements by
Bumi.
At start up, 13 wells will be available comprising 7 producers
and 6 injectors. As with all developments of this scale, wells will
be brought onstream in a phased manner in line with good reservoir
management practices aiming to maximise long term productivity and
value.
The project continues to be under budget and on schedule.
Northern North Sea production
Thistle/Deveron
A programme improving the reliability of water injection is
being implemented and is already having a positive impact.
The Don fields
Well performance has been particularly good at Don Southwest,
with high levels of production efficiency across the Don
fields.
Heather/Broom
The 2017 Heather/Broom production is progressing broadly
according to plan.
Central North Sea production
Greater Kittiwake Area ('GKA') & Scolty/Crathes
The work programme in GKA for 2017 is focused on optimising
production from the existing well stock including the Scolty and
Crathes fields. Good production has been delivered from the GKA
fields, with very high levels of plant uptime. Initial rates on
Scolty and Crathes for H1 have been constrained due to operational
issues. Work is currently ongoing to restore the rates.
Alma/Galia
As expected at the time of EnQuest's results announcement in
March, 2017 production from Alma/Galia has been lower than 2016,
given two wells are shut in, production outages in Q1 due to storm
damage and natural decline. Discussions are ongoing with the ESP
supplier on rectification plans to address pump reliability
issues.
Alba (non-operated)
Production from Alba benefitted from the A49 well coming back
online in March.
Malaysian production
PM8/Seligi
EnQuest is continuing to enhance production by investing in low
cost well interventions and facility projects to improve production
efficiency, including gas compression and power generation control
system upgrades. In addition, robust maintenance and integrity
inspection campaigns of platform structures, topsides, and subsea
pipelines are continuing to ensure safe operations.
Longer term, EnQuest will extend field life through further
investment in idle well restoration, facility improvements and
upgrades and technical studies supporting development drilling,
secondary recovery and capacity enhancement projects to increase
ultimate recovery.
Tanjong Baram
Focus remains on steady, safe and low cost operations in 2017.
Tanjong Baram field has produced since December 2016 without an
unplanned shutdown.
Finanical
As at 30 April 2017, net debt was approximately $1,912m,
including $28m additional 'payment in kind' interest since 31
December 2016. Cash and undrawn facilities totalled $244m.
Ends
For further information please contact:
EnQuest PLC Tel: +44 (0)20 7925 4900
Amjad Bseisu (Chief Executive)
Jonathan Swinney (Chief Financial Officer)
Michael Waring (Head of Communications & Investor
Relations)
Tulchan Communications Tel: +44 (0)20 7353 4200
Martin Robinson
Martin Pengelley
Notes to editors
EnQuest is one of the largest UK independent producers in the UK
North Sea. EnQuest PLC trades on both the London Stock Exchange and
the NASDAQ OMX Stockholm. Its operated assets include
Thistle/Deveron, Heather/ Broom, the Dons area, the Greater
Kittiwake Area, Scolty/Crathes and Alma/Galia, also the Kraken
development; EnQuest also has an interest in the non-operated Alba
producing oil field. At the end of December 2016, EnQuest had
interests in 25 UK production licences, covering 35 blocks or part
blocks and was the operator of 23 of these licences.
EnQuest believes that the UKCS represents a significant
hydrocarbon basin, which continues to benefit from an extensive
installed infrastructure base and skilled labour. EnQuest believes
that its assets offer material organic growth opportunities, driven
by exploitation of current infrastructure on the UKCS and the
development of low risk near field opportunities.
EnQuest is replicating its model in the UKCS by targeting
previously underdeveloped assets in a small number of other
maturing regions; complementing its operations and utilising its
deep skills in the UK North Sea. In which context, EnQuest has
interests in Malaysia where its operated assets include the
PM8/Seligi Production Sharing Contract and the Tanjong Baram Risk
Services Contract.
Forward looking statements: This announcement may contain
certain forward-looking statements with respect to EnQuest's
expectation and plans, strategy, management's objectives, future
performance, production, reserves, costs, revenues and other trend
information. These statements and forecasts involve risk and
uncertainty because they relate to events and depend upon
circumstances that may occur in the future. There are a number of
factors which could cause actual results or developments to differ
materially from those expressed or implied by these forward looking
statements and forecasts. The statements have been made with
reference to forecast price changes, economic conditions and the
current regulatory environment. Nothing in this presentation should
be construed as a profit forecast. Past share performance cannot be
relied on as a guide to future performance.
Glossary
DC Drill centre
ESP Electrical submersible pump
FPSO Floating production, storage and offloading vessel
SVT Sullom Voe Terminal
This information is provided by RNS
The company news service from the London Stock Exchange
END
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