Work on EnQuest’s new North Sea headquarters in Aberdeen is proceeding as planned despite the firm’s plunging share price and oil and gas industry woes.
It is understood that there is no threat to the development in the heart of the Granite City, where EnQuest’s new north-east home – Annan House – is taking shape.
It is part of a bigger project, known as The Grande, which is helping to regenerate a long-neglected part of Aberdeen.
More than 26,000 square feet of Annan House has already been released to the market for other potential tenants as the transformation of the site continues.
Sources told the P&J that EnQuest’s own plans to move in later this year were unaffected by the troubles now plaguing the offshore industry since oil prices tumbled to less than $50 a barrel.
Oil majors and service companies have announced hundreds of job cuts as they grapple with the falling crude prices, which have added to pressure they were already facing from spiralling overheads and uncertainty about taxes.
Energy shares have taken a battering in recent weeks, with EnQuest one of the biggest victims on concerns among investors that it will struggle to meet its banking commitments.
The value of EnQuest’s stock has plunged by more than four-fifths since last summer, wiping hundreds of millions of pounds off the shares, despite the firm having in excess of 80% of its production hedged at oil prices in the high $80s.
Despite speculation about its financial health and talk of imminent job cuts, the Press and Journal understands the company expects to satisfy its debt repayments.
EnQuest, which describes itself as the largest UK independent oil producer in British waters, also has a big jump in production to look forward to this year.
Output from the Alma/Galia central North Sea development – due onstream in mid-2015 – is expected to add 13,000 barrels of oil equivalent (boe) a day to the 27,500 boe average for most of 2014.
The Kraken field – a “cornerstone” of EnQuest’s long-term production portfolio and estimated to contain about 140million barrels – is on schedule for first oil in 2017.
In November, chief executive Amjad Bseisu said the firm was in the midst of planning its capital expenditure programme for 2015 and would set out the details alongside full-year results in March.
EnQuest, which was formed in April 2010 after energy service giant Petrofac decided to hive off its North Sea oil and gas assets and integrate them with those of Lundin Petroleum, currently employs about 500 people across two separate sites in Aberdeen.
Its new building, which is bounded by Palmerston Road, Raik Road, Poynernook Road and Stell Road, will allow the company’s north-east staff to work under one roof.
The moniker Annan House was chosen in line with the firm’s policy of naming North Sea assets after Scottish rivers and locations such as Don, Deveron and Cairngorm.
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