EnQuest PLC Completion of Magnus Transaction (1195J)
03 December 2018 - 6:00PM
UK Regulatory
TIDMENQ
RNS Number : 1195J
EnQuest PLC
03 December 2018
EnQuest PLC, 3 December 2018
Completion of Magnus Transaction
EnQuest PLC ('EnQuest'), an independent oil and gas production
and development company listed on the London and Stockholm stock
exchanges (ENQ.L and ENQ.ST), is pleased to announce that it has
completed the acquisition of the remaining 75% interest in the
Magnus oil field ('Magnus'), an additional 9.0% interest in the
Sullom Voe Oil terminal and supply facility ('SVT') and additional
interests in associated infrastructure from BP as planned.
As outlined in the announcement on 7 September 2018, the
addition of Magnus is expected to add:
-- approximately 60 MMboe of 2P reserves (equating to
approximately 30 per cent. of the Group's reserve base) as at 1
January 2018;
-- approximately 10 MMboe of 2C resources (equating to
approximately 6 per cent. of the Group's resource base) as at 1
January 2018; and
-- approximately $500 million of net present value to the Group
at $70/bbl long-term oil price, as outlined in the Competent
Person's Report on Magnus included in the Prospectus dated 7
September 2018
With an effective economic date of 1 January 2017, it is
estimated that the net amount financed by BP and to be repaid out
of the future cash flows from the 75% interest in Magnus is around
$100 million (subject to customary completion adjustments). EnQuest
has also paid its $100 million cash contribution of the
consideration from the funds received through the Rights Issue
undertaken in October.
EnQuest CEO, Amjad Bseisu, said:
"We are delighted to have completed the acquisition of Magnus,
the Sullom Voe Terminal and associated infrastructure from BP.
These assets are a strong strategic fit for EnQuest to which we can
apply our life extension expertise and deliver value for all our
stakeholders.
"The addition of Magnus is expected to add material production
and cash flow from the addition of significant low-cost 2P
reserves. These cash flows will help facilitate the planned
reductions in the Group's debt. We continue to assess further value
accretive,
short-cycle opportunities that have been identified at
Magnus.
"SVT is an essential element of our North Sea portfolio through
which we flow over one-third of our North Sea production. We
are
on track to deliver around GBP50 million of cost savings in our
first year as operator, and plan further savings in 2019 while
exploring opportunities for new business to maximise the terminals
value."
EnQuest now has a 100.0% equity stake in Magnus, 15.1% in SVT,
18.0% in the Ninian Pipeline System and 41.9% in the Northern Leg
Gas Pipeline.
This acquisition and the associated details of the transaction
were announced on 7 September 2018.
Ends
For further information please contact:
EnQuest PLC Tel: +44 (0)20 7925 4900
Amjad Bseisu (Chief Executive)
Jonathan Swinney (Chief Financial Officer)
Ian Wood (Communications & Investor Relations)
Tulchan Communications Tel: +44 (0)20 7353 4200
Martin Robinson
Martin Pengelley
Notes to editors
ENQUEST
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, Magnus, the Greater
Kittiwake Area, Scolty/Crathes Alma/Galia and Kraken; EnQuest also
has an interest in the non-operated Alba producing oil field. At
the end of June 2018, EnQuest had interests in 20 UK production
licences and was the operator of 18 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 announcement should
be construed as a profit forecast. Past share performance cannot be
relied on as a guide to future performance.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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