EnQuest plc today said it expected full year production for 2020 to be below its guidance range for its operations in the UK and Malaysia.
Group production averaged 60,777 boepd in the ten months to end October 2020, with full year production guidance expected to be slightly below the mid-point between 57,000 to 63,000 boepd.
In its operational update for the year to end October, EnQuest said the lower figures reflected the maintenance shutdown and an unplanned outage at PM8/Seligi (Malaysia).
However the company added that the outage had no material impact on cash flow due to the company’s production sharing contract cost recovery mechanism.
The independent production and development company’s operations include (upstream) Magnus, Kraken, Greater Kittiwake Area, Scolty/Crathes and Alba assets.
| Net daily average production on a working interest basis | 1 Jan 2020 to 31 Oct 2020 | 1 Jan 2019 to 31 Oct 2019 |
|---|---|---|
| (Boepd) | (Boepd) | |
| Magnus | 17,569 | 18,645 |
| Kraken | 26,637 | 24,172 |
| Other North Sea | 9,456 | 17,294 |
| Total UKCS | 53,662 | 60,111 |
| Total Malaysia | 7,115 | 8,390 |
| Total EnQuest | 60,777 | 68,501 |
As at 31 October 2020, the group’s net debt was circa $1,388m (30 June 2020: $1,351m) with cash and available bank facilities amounting to $268m (30 June 2020: $270m)
Free cash flow generation was $95m and the group’s senior credit facility has reduced to circa $385m (excluding payment in kind) following the voluntary early repayment of $40m in November
NORTH SEA
EnQuest reported strong production at Kraken resulting in average gross production of 37,783 bopd with full year production expected to be slightly above the 30,000 to 35,000 bopd (gross) guidance range.
Production slightly fell at Magnus due to natural declines and sea water lift pump system issues which have now been resolved. Year-to-date production efficiency is 81% and water injection efficiency is 84%.
Average production in the ten months was 9,456 boepd – 45% lower compared to the same period in 2019 mainly due to production stopping at the Thistle/Deveron and Heather/Broom fields.
Underlying natural declines contributed affected the Dons, and Alma/Galia ceased production at the end of June. EnQuest said that the reductions were partially offset by continued strong performance on Scolty/Crathes.
Alba has performed in line with expectations.
MALAYSIA
EnQuest’s Malaysia operations include its PM8 extension production sharing contract, consisting of the PM8 and Seligi fields and the Block PM409 production sharing contract.
Average production in Malaysia in the ten months to end October 2020 was 7,115 boepd, 15% lower than the same period in 2019.
The decrease was primarily driven by a detached riser at the Seligi Alpha platform which provides gas lift and injection to the Seligi Bravo platform.
The release of gas and a subsequent fire initiated an automatic emergency shutdown of the PM8/Seligi field.
Partial operations restarted within two days with wells flowing under natural pressures.
Production is currently at some 40% of normal levels with a single compressor train operational and is expected “to remain constrained through the first half of next year.”