Oil firm EnQuest said yesterday it was poised for substantial production growth from its UK hubs.
Its bullish update on the North Sea is based on output expectations for the Alma field – due onstream in mid-2015 – and Kraken, which is on schedule for first oil in 2017.
The upbeat message comes at a critical time for the industry amid uncertainty over the tax environment, low oil prices, high operating costs and declining output.
A string of big projects are currently on hold and the big oil majors are shedding jobs.
But there have been several positive stories for the North Sea during the past few weeks – such as the Vorlich/Marconi discovery by BP and GDF Suez, yesterday’s announcement by Atlantic Petroleum of a gas find on Pegasus West and start-up from both the £700million Kinnoull field and £2billion Golden Eagle project.
EnQuest yesterday reported a 19.2% rise in oil production in the first 10 months of the year, helped by new assets in Malaysia and Tunisia – its first producing oil fields outside the North Sea.
Shares in the company rose sharply in early trade on the London Stock Exchange.
Production during January-October rose to 27,567 barrels of oil equivalent (boe) per day.
EnQuest, which specialises in maximising oil output from old fields, kept its production target for the year at between 25,000-30,000 boe per day.
The company said it expected capital expenditure in the UK of £443-£506million for 2015, weighted towards the second half of the year.
EnQuest – the largest UK-based independent producer operating on this side of the North Sea – was recently offered eight licences in the 28th offshore licensing round.
In its latest interim management statement, chief executive Amjad Bseisu said: “The 19% growth in production to the end of October reflects continuing strong reservoir performance and top quartile production efficiency from our existing producing assets.
“It also reflects a substantial initial contribution from PM8/Seligi and Didon, our first producing oilfields outside the North Sea.
“The new interests EnQuest has acquired this year will add approximately 20MMboe to net 2P (proven and probable) reserves.”
He added: “The oil and gas industry has been adjusting its plans for the impact of recent decreases in oil prices and in associated service costs.
“We are currently planning our capex (capital expenditure) programme for 2015 and will set out the detail of our 2015 investment programme with our full year results.”
“With Alma due onstream in mid-2015 and Kraken on schedule for first oil in 2017, EnQuest is set for substantial production growth from its UK hubs.
“Growth is also enhanced by production from our new businesses in south-east Asia and north Africa, increasing the diversity of EnQuest’s portfolio.”
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