Oil producer EnQuest said yesterday its plans for the North Sea were “on schedule and on budget” for its target of more than doubling output from its assets in the UK.
In its latest operational update, the firm said daily production for the first four months of 2015 averaged 22,601 barrels.
This was down from 25,597 a year earlier, which the company said was mainly due to a shut-in on the Don fields and new wells boosting production from Thistle and Deveron in 2014.
But the figure is expected to soar to about 50,000 within a few years, thanks to several major projects.
The Alma/Galia central North Sea development, about 193 miles south-east of Aberdeen, is due onstream in mid-2015 and expected to eventually add up to 13,000 barrels net to daily output.
EnQuest also has a 60% stake in Kraken, one of the largest current developments in the North Sea, which is on schedule for start-up in 2017 and expected to produce up to 50,000 barrels of oil per day for its partners.
London-based EnQuest said its oil production topped 30,000 barrels a day for the first time during the first four months of 2015, up 20% year-on-year, thanks to a strong performance at its Malaysian asset.
The company specialises in maximising oil output from old fields that are not profitable enough for bigger rivals.
Its main focus is on the North Sea, where future operations are to be managed from a new regional headquarters – the 120,000sq ft Annan House – next to the Union Square shopping centre in the heart of Aberdeen.
But the firm acquired an interest in the PM8/Seligi oilfield in Malaysia last June in order to grow outside of its core UK market, where total production is in long-term decline and fresh investments have stalled dramatically.
EnQuest said it had cut operating costs by more than a quarter since the sharp decline in oil prices last July.
Chief executive Amjad Bseisu added: “We are passing the cost savings down the supply chain. We have been negotiating with drilling rigs contractors… we’ve reduced those by around a third.”
Contractor rates were cut by around 25%, he said, adding that EnQuest had also hedged 10million barrels of oil at $65 a barrel this year.
Oil and gas analyst David Round at BMO Capital Markets, the investment banking subsidiary of Canadian Bank of Montreal, said: “Operationally, EnQuest continues to deliver.
“As we have highlighted before, it is the most geared of any of the small-caps to the supply chain deflation we see playing out in the North Sea.”
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