Oil and gas operator EnQuest raised its full-year production guidance yesterday after completing two wells ahead of schedule and boosting oil flow from another.
The company, formed in a merger of the UK oil and gas production assets of FTSE 100-listed energy services group Petrofac and Sweden’s Lundin Petroleum earlier this year, said it had achieved output of 18,708 barrels of oil equivalent per day (boepd) in the six months to June 30.
This was better than analyst consensus forecasts of 16,333boepd and up 60% on a pro-forma basis compared with a year earlier.
Chief executive Amjad Bseisu said: “We’ve had excellent execution so the wells are coming on stream earlier than expected and also the wells are performing better than expected.”
A stronger-than-expected performance at the Thistle oil field and the completion of two wells at the Don fields ahead of schedule helped boost production and encouraged the company to up its output guidance for the full year to 20,000boepd from 18,000boepd.
At 20,000 boepd, 2010 production would be 47% above the pro-forma output figure for 2009. Mr Bseisu said there was no change to EnQuest’s production guidance for 2011, which would stay at 26,000boepd.
Shares in EnQuest, which had risen 16.6% since the company listed in April, gained 6.5% to 119.3p yesterday.
Mr Bseisu said EnQuest had strong free cash flow of £43.7million for the first six months of 2010, leaving it with a cash balance of £48.97million plus around £128million in loan facilities.
EnQuest, which is targeting acquisitions to help meet its aim of raising production by 10% a year in the medium term, announced its first acquisition earlier this month.
It is to buy North Sea operator Stratic Energy for £80million including debt, a deal which will consolidate its position in the West Don field and give it a new development in Crawford in the UK central North Sea.
The deal is expected to complete in November.
Mr Bseisu said: “We’re seeing both independents as well as major companies looking at rationalising their portfolios and putting assets on the market. We see significant opportunities ahead to utilise our cash.”
EnQuest reported pre-tax profits of £26.7million for the half year compared with pro-forma losses of £3,846 a year earlier. Revenue for the period was £143.94million, up from £62million.
The company operates from Aberdeen, where it employs 200 staff. Including contractors, its North Sea payroll is almost 1,000.
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