EnQuest selling stake in North Sea Golden Eagle oilfield, sources say (updated)

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16/04/2024 15:42

(Updates share reaction in paragraph 4, adds production in 6)
    By Ron Bousso and Deep Kaushik Vakil
       LONDON, April 16 (Reuters) - Britain's EnQuest  ENQ.L 
is looking to sell its 27% stake in the Golden Eagle oilfield in
the British North Sea as it seeks to reduce debt levels, two
sources told Reuters on Tuesday.     
    It was unclear how much the sale of the non-operated stake
would raise. The process is being run by investment bank
Jefferies, the sources said.
    A spokesperson for EnQuest declined to comment. A
spokesperson for Jefferies also declined to comment.
    Shares in the company rose about 4.5% on Tuesday.
    EnQuest bought the Golden Eagle stake from Suncor  SU.TO  in
2021 for $325 million - roughly equal to EnQuest's market
capitalisation at the time - to boost its production capacity by
10,000 barrels of oil equivalent per day (boe/d).
    The company produced 43,812 boe/d last year and projects
output of between 41,000 and 45,000 boe/d this year.
    EnQuest has struggled in recent years with high debt levels
and a drop in profits after Britain imposed a 35% windfall tax
on North Sea producers after the surge in energy prices
following Russia's invasion of Ukraine in 2022.
    The company, headed by CEO Amjad Bseisu, reported a net loss
of $31 million in 2023 and net debt of $481 million, compared
with $717 million a year earlier. Its current market
capitalisation is around 307 million pounds ($382 million).
    EnQuest also announced in March its first shareholder
distribution in the form of a $15 million share repurchase in
2024.
    The Golden Eagle project is operated by Chinese-owned oil
and gas firm CNOOC  0883.HK  and includes the producing Golden
Eagle, Peregrine, and Solitaire fields.
    When the purchase was announced in February 2021, Chief
Financial Officer Jonathan Swinney had said it would earn
EnQuest around $13 million a month. The company completed a $750
million debt refinancing in June 2021 to support the purchase.
    EnQuest's website says Golden Eagle still has "significant
development potential, including further sub-sea and platform
infill drilling, with an anticipated field life extending into
the early 2030s."


($1 = 0.8033 pounds)

 (Reporting by Ron Bousso in London and Deep Vakil in Bengaluru;
editing by David Evans, Kirsten Donovan)
 ((DeepKaushik.Vakil@thomsonreuters.com;))