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Enquest profit declines; to delist from Nasdaq Stockholm due to Brexit

5th Sep 2023 11:07

(Alliance News) - Enquest on Tuesday announced a sharply lower half-year profit as it applied to delist from the Nasdaq Stockholm, citing Brexit.

Enquest shares fell 13% to 15.15 pence each on Tuesday morning in London. The stock is down 51% over the past 12 months.

EnQuest is a London-based oil and gas producer with assets in the UK and Malaysia.

For the first half of 2023, Enquest reported a pretax profit of USD112.9 million, down 38% from USD182.6 million a year prior. Adjusted pretax profit declined 47% to USD221.4 million from USD416.1 million.

The company swung to a post-tax loss of USD21.2 million, compared to a profit of USD203.5 million a year prior, which it blamed on the UK Energy Profits Levy, a windfall profit tax.

Notably, the realised oil price per barrel declined by 16% to USD75.8 from USD89.9. Output decreased 8.5% to 45,480 barrels of oil equivalent per day from 49,726 a year ago. Looking ahead, Enquest expects to produce between 42,000 and 46,000 boepd in all of 2023, down at least 2.7% from 47,259 in 2022.

Revenue declined 22% to USD732.7 million from USD943.5 million. Enquest took a net impairment charge of USD96.5 million in financial 2023, compared to a gain of GBP10.1 million a year prior.

In 2023, the company expects to pay a UK windfall tax of around USD75 million.

The company on Tuesday also said it has applied to delist its shares from the Nasdaq Stockholm due to the UK's departure from the UK. Before Brexit, the UK was the company's primary EU listing. With the Nasdaq Stockholm now being Enquest's primary EU listing, this adds "significant additional compliance requirements," which had been minimal when the UK was still part of the EU.

"EnQuest has no legal or physical presence in Sweden and is therefore reliant on external support to ensure compliance with Nasdaq Stockholm listing requirements. This has created a source of additional unexpected compliance cost for the company," it explained.

Meanwhile, Nasdaq appointed Michael Borrell to the board as non-executive director from Tuesday. Borrell worked over 35 years with French oil major TotalEnergies SE, where he managed the integration of the Maersk oil business. At TotalEnergies, he was senior vice president of North Sea & Russia, and Denmark country chair in 2020. He was non-executive director of Russia's Novatek OAO from 2015 to 2021.

By Tom Budszus, Alliance News reporter

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