Oil firm Enquest has vowed to press ahead with the development of two North Sea oil fields as the oil price dipped below $40 a barrel before leveling back up.
The Aberdeen-based firm said it has approved the development of a £83million Scolty and Crathes fields about 83 miles from St Fergus, near Peterhead, in the central UK North Sea.
But the company’s chief executive Amjad Bseisu also said the company was looking to sell stakes in a number of its producing assets in an effort to boost cash flow in the face of a dim outlook for oil prices.
The FTSE-listed company has launched a process to farm out 20 to 30% of the 4,450 barrel per day Heather/Broom field which it operates.
EnQuest currently holds a 63% stake in the field, along with Wintershall and Ithaca.
EnQuest is also seeking to sell up to a quarter of its 60% in the Kraken development, which is expected to start production in the first half of 2017.
EnQuest is also aiming at finding investors for a 10 to 20% stake in the Scolty/Crathes development, in which it is the operator with a 50% interest. The fields, which will be tied into nearby platforms, is expected to start delivering oil in the first half of 2017, EnQuest said.
Mr Bseisu said: “We’re looking to market part of our North Sea portfolio. We have a process to see if we can get some partners to get in.”
The farm-ins will allow EnQuest to free up cash for further investment in 2017 and beyond, Mr Bseisu added.
EnQuest has lowered its operating expenditure to $31-32 per barrel from around $38, and the figure is expected to fall to $26-28 in 2016, it said in an update yesterday.
The ramp-up of new oil fields will mean the company will increase 2016 production to 44,000-48,000 barrels of oil a day from 33,000-36,000 this year.
As a result of some 2016 investments brought forward into 2015, EnQuest now expects full-year cash capital expenditure to reach £500million, £100million higher than previously expected.
This will mean net debt at the end of the year will rise to around £1billion, EnQuest said.
Shares in the company rose over 5% to 20.25p.
Brent crude was down 25 cents at $40.48 a barrel last night, after setting a session low at $39.81.
Recommended for you
