EnQuest has announced a full year 2023 operations update and 2024 guidance
EnQuest Chief Executive, Amjad Bseisu, said:
'EnQuest delivered another good year of operational performance in 2023, with production averaging 43.8 Kboed (in line with the mid-point of guidance). Having de-levered the business and with debt maturities reset to 2027, we now aim to build on that strong foundation, utilising our differentiated operating capability and tax assets as we pivot the business to refocus on future growth during 2024.
'We continue to achieve top quartile production efficiencies across the portfolio, while maintaining discipline in our cost management and investment decisions drove expenditure lower than 2023 guidance. Our differentiated operating capability now extends to decommissioning activities, with 2023 representing another record year of northern North Sea well plug and abandonments as 25 wells were completed at Heather and Thistle.
'Having de-levered by c. $1.5 billion since 2017, and with net debt at the end of 2023 reduced to $481 million, the Group is focused on delivering continued strong performance from the existing portfolio and the pursuit of value-accretion and transformational production acquisitions, both in the North Sea and internationally. The farm down of a 15% interest in Bressay and the EnQuest Producer FPSO was completed in December and represents an important step in moving the project forward.
'Building on this excellent operational performance and by remaining disciplined in our investment decisions, we have set the foundation for a pivot to growth during 2024. The Group will provide an update on shareholder return plans when we announce our final audited results in March.'
2023 performance
- Group production averaged 43,812 Boepd (guidance 42,000 Boepd to 46,000 Boepd), reflecting high levels of uptime and maintenance schedule optimisation.
- New energy business re-launched as Veri Energy, with new energy and decarbonisation projects being progressed at Sullom Voe Terminal, boosted by the award of four carbon storage licences.
- Expected cash expenditure: Operating costs c. $370 million (guidance $400 million); Capital costs c. $160 million (guidance $160 million); Decommissioning costs c. $60 million (guidance $60 million).
- Net debt c. $481 million at 31 December 2023; a c. $236 million reduction versus 31 December 2022.
- Gross debt $795 million at 31 December 2023; a c. $1.4 billion reduction since end-2017. All maturities have been extended to 2027.
- c. $500 million liquidity at 31 December 2023, providing a platform for transformational transactional growth, enhanced by EnQuest’s advantaged UK tax position.
- Sale of 15% interest in Bressay and EnQuest Producer FPSO which closed in 2023. Cash settlement realised in January 2024.
- Leadership team and Board refreshed – focused on the exciting next phase of EnQuest’s journey.
2024 Guidance
- Production guidance: 41,000 Boepd to 45,000 Boepd.
- Cash capital expenditure to total c. $200 million; operating expenditure to total c. $415 million; and decommissioning expenditure to total c. $70 million.
- Investment is scaled to maintain production, maximise cash flow, drive capital efficiency and reduce future emissions and operating costs.
Outlook – 2025 and beyond
- Capital-efficient investment programme; targets organic production growth in 2025.
- Kraken FPSO lease rate reduces by c. 70% from 1 April 2025 and major projects at SVT are expected to crystallise significant operating cost and emission reductions in 2026 and beyond.
Click here for full announcement
Source: EnQuest
