Tuesday 24 November 2020

Strong Kraken performance continues

Group production averaged 60,777 Boepd in the ten months to end October 2020; full year production expected to be slightly below the mid-point of the 57,000 to 63,000 Boepd guidance range

As previously guided, Group production is lower in the second half compared to the first half of the year, reflecting the maintenance shutdown schedule as well as an unplanned outage at PM8/Seligi. The PM8/Seligi outage has no material impact on cash flow due to the Production Sharing Contract cost recovery mechanism

Strong production performance at Kraken resulted in average gross production of 37,783 Bopd. Full year production is expected to be slightly above the 30,000 Bopd to 35,000 Bopd (gross) guidance range

Operations continue to be materially unaffected by COVID-19

Positive free cash flow generation

At 31 October 2020, net debt was c.$1,388 million (30 June 2020: c.$1,351 million) with cash and available bank facilities amounting to c.$268 million (30 June 2020: c.$270 million)

Free cash flow generation of c.$95 million for the ten months to 31 October 2020

The Group’s senior credit facility has reduced to c.$385 million (excluding payment in kind) following the voluntary early repayment of $40 million in November

Retail and High Yield bond interest paid in kind

By the end of October, c.11.4 MMbbls of oil hedges had been settled, with c.10.3 MMbbls achieving an average floor price of c.$43/bbl. For the remaining two months of 2020, c.0.7MMbbls of oil hedges are in place at an average floor price of c.$41/bbl

EnQuest Chief Executive, Amjad Bseisu, said:

"The Group has delivered production in line with guidance year to date, with Kraken continuing to perform well. We expect production to be slightly below the mid-point of the 57,000 to 63,000 Boepd guidance range for the full year 2020, reflecting the impact of the unplanned outage at PM8/Seligi.

"We have continued to generate positive free cash flows in the period and have again made a voluntary early payment of $40 million against the April 2021 scheduled amortisation of our senior credit facility. We remain focused on cost control and capital discipline to maintain free cash flow breakeven at around $33/Boe in 2020.”

More