EnQuest boasts 25 pct production growth driven by North Sea assets

London-listed oil and gas company EnQuest recorded a 25 percent production growth in the first four months of the year driven by strong production from its UK North Sea assets.

In an operational update on Thursday EnQuest said that, in the four months to end April 2019, its production averaged 69,973 Boepd.

The company’s full year 2019 guidance of 63,000 Boepd to 70,000 Boepd remains unchanged.

EnQuest Chief Executive, Amjad Bseisu, said: “Production is towards the top end of our full year guidance range, our capital program is on track and we have continued to generate strong cash flows and reduce our debt.

“FPSO performance at Kraken has improved significantly with two trains online and we continue to drive further improvements with the FPSO operator. Production from DC4 at Kraken has been better than expected and both Magnus and PM8/Seligi have performed strongly.”

Production from Northern North Sea assets up 75%

In the Northern North Sea, EnQuest’s average production of 34,766 Boepd was 75% higher than the same period in 2018. This increase was driven by the contribution from Magnus, partially offset by single compressor operations at Heather and natural declines across the Northern North Sea area.

EnQuest took over Magnus field, as well as additional 9% interest in the Sullom Voe Oil terminal and supply facility and additional interests in associated infrastructure in the UK North Sea, from BP in late 2018.

EnQuest said that production performance had remained strong at Magnus with production efficiency greater than 95% prior to the planned maintenance shutdown. The facility’s water handling capabilities have been further improved through the successful return to service of the second deaeration tower in May, with the planned shutdown also completed.

At the end of 2018, the group’s estimate of 2C resources at Magnus was around 50 MMboe, with a number of economic, drillable targets having been identified. Overall, the group estimates there is 270 MMbbls of remaining mobile oil in place, which, alongside the potentially large historical gas discovery made by BP that is currently being evaluated, provides the opportunity for a long-term, low-cost development program of this giant resource.

Stable production and water injection efficiency at Thistle and the Dons has delivered aggregate production in line with the group’s plans, with the drilling team on Thistle continuing to successfully abandon wells in line with the group’s asset life extension strategy.

EnQuest said that the Dunlin bypass project is progressing as planned with the first phase of the sub-sea construction works, including the new pipeline and structure installation, being completed on schedule.

Modifications on the Thistle, Northern Producer and Magnus facilities are also progressing in readiness for the final subsea tie-in phase. The new export route is planned to be operational during the summer.

At Heather, production was reduced due to single compressor operations whilst upgrades took place during the period. This has been partially offset by barrel-adding well intervention work.

Central North Sea assets record 12% growth 

In the Central North Sea, average production in the four months to end April 2019 of 6,742 Boepd was 12% higher than the same period in 2018, driven by improved performance at Alma/Galia following the replacement of three electric submersible pumps in 2018.

Production from Scolty/Crathes, where wax in the flow line continues to limit production, is expected to improve significantly following completion of the replacement pipeline project.

Improved performance at Kraken

Production efficiency has increased materially following the resumption of a two-train operation in mid-March, averaging in excess of 33,000 Bopd (gross) in March and April, up materially on the first two months of the year (c.23,000 Bopd (gross)).

All DC4 wells are onstream and producing ahead of expectations and the company said it remains confident in its expectations of subsurface performance. While further production efficiency improvement remains the group’s operational priority, EnQuest continues to expect Kraken to deliver average production in line with guidance of between 30,000 Bopd and 35,000 Bopd (gross) in 2019.

Since first production, more than 17 million barrels of oil have now been produced and 35 cargoes offloaded from the FPSO, with eight of these cargoes offloaded in 2019. Cargo pricing has continued to improve.

Malaysian operations

Average production in Malaysia in the four months to end April 2019 of 8,693 Boepd was 1% lower than the same period in 2018.

Production has increased from PM8/Seligi as a result of high production efficiency of over 95% and better than expected performance from the group’s idle well restoration program, which started earlier than planned and has seen five wells restored to production.

Production at Tanjong Baram has decreased reflecting natural decline.

Drilling operations are on track to start in the third quarter, with first production from the two-well program expected around the end of the quarter as planned.

In the update on Thursday EnQuest also said that its net debt at the end of April was $1,724 million, down from $1,774 million at December 31, 2018, reflecting strong operational performance and a supportive oil price more than offsetting the anticipated unwind of the c.$50 million favorable working capital position at the end of 2018.

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