Oil and gas firm EnQuest said yesterday it would spend more than £600million on at least 11 new wells in the UK North Sea this year and raised its stake in one of its oil fields.
The company, which more than doubled full-year profits, said half of the capital expenditure would be on its central North Sea Alma Galia development.
The North-Sea focused company added it had bought an additional 18.5% stake in West Don from JX Nippon Exploration and Production (UK) for £21.3million. EnQuest now holds 63.5% of West Don.
Chief executive Amjad Bseisu said the firm welcomed measures in the recent Budget to encourage the development of smaller fields, adding: “These positive fiscal changes clearly make the UK oil and gas sector more competitive.
“EnQuest will continue to work with the UK Government and the industry to achieve further development of the substantial unrealised potential in the UK North Sea.”
EnQuest said that after a nine-well programme and about £226million of capital expenditure in 2011, it expected to invest about £626million in the North sea during 2012. This would create or safeguard thousands of jobs, directly and indirectly, it added.
Its 2012 capital programme includes 11 new wells and puts the Alma and Galia development on track for first oil by the end of next year.
The firm had net cash of £237.4million at December 31 and said its spending plans would be partially funded by a £564million credit facility.
Profits before tax and net finance costs leapt by 130% last year, at £244.4million.
Revenue rocketed by 52.3% during 2011, to £586.5million, as production increased by 12.5%.
Mr Bseisu said: “We produced an average of 23,698 barrels of oil equivalent (boe) per day, reinforcing our position as the largest UK independent producer in the UK North Sea. We have also significantly consolidated and expanded our asset base, adding interests at Broom, Crawford/Porter, Crathes/Scolty, Kildrummy and Kraken, assuming operatorship and control where we did not already hold it.”
Analysts have speculated that EnQuest could buy North Sea peer Ithaca Energy but Mr Bseisu declined to comment.
Meanwhile, Aberdeen-based Faroe Petroleum swung to full-year profits – helped by a £40million gain related to an asset swap with Norwegian state-owned oil firm Petoro last year.
Faroe said its proved and probable reserves rose five-fold to 23.8million boe, at January 1, as a result of the deal with Petoro. The move helped to boost 2011 revenue to £80.2million, from £15.1million a year earlier.
Faroe reported pre-tax profits of £14.3million. This against losses of £26million in 2010.
Recommended for you
