13th Aug 2014 08:40
LONDON (Alliance News) - EnQuest PLC posted a rise in pretax profit in the first half on Wednesday, sent higher by a jump in production volumes year-on-year which pushed its revenue higher in the period, though it warned of further delays to the Alma/Galia development in the North Sea and said its cost of sales also jumped higher in the period.
Pretax profit for the FTSE 250-listed oil and gas firm rose 3.6% to USD284.0 million from USD274.0 million a year earlier. That came on the back of an 11% rise in revenue to USD503.8 million from USD455.9 million last year. But its cost of sales rose to USD339.5 million in the period from USD280.9 million in 2013.
Production for the company was significantly higher, up 18% to 25,292 barrels of oil equivalent per day from 21,455 boepd as year ago. The volumes were driven higher by strong reservoir performance and high production efficiency, both of which EnQuest expects to continue in the second half.
The firm has maintained its full-year average production guidance at 25,000-30,000 boepd, reflecting the ongoing performance of its existing hubs, a reduction from its Alma/Galia development in the North Sea and the first contributions from the PM8/Seligi site in Malaysia.
EnQuest acquired an operated interest in the producing Seligi oil field and PM8 production sharing contract in June from ExxonMobil Exploration and Production Malaysia Inc for USD67 million in cash.
On Alma/Galia, the company said progress has been made on the floating production, storage and offloading unit for the development, but warned sail away is now weather-dependent. Due to the winter weather, sail away for the site is now planned for the first half of 2015, with the first oil due by the middle of the year. Reporting its full year results for 2013 in March, the company had said it expects Alma/Galia production to start in the second half of this year.
The group said, however, that the FPSO is now mostly complete and commissioning has commenced, with three wells completed and a fourth in the process of being completed for production.
"Production efficiency has been an important driver of the strong performance from our existing assets in the first half and we see this continuing in the second half of the year," said EnQuest Chief Executive Amjad Bseisu.
Enquest shares were down 4.6% to 118.99 pence on Wednesday, making it the third biggest faller in the FTSE 250.
By Sam Unsted; [email protected]; @SamUAtAlliance
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