REG - EnQuest PLC - Operations Update

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RNS Number : 0860K  EnQuest PLC  27 May 2025

EnQuest PLC

("EnQuest" or the "Company")

Annual General Meeting - Operations Update

27 May 2025

 

EnQuest today provides the following operations update ahead of the Company's
Annual General Meeting ('AGM'), which will be held today at 14.00 BST.

 

EnQuest Chief Executive, Amjad Bseisu, commented:

"EnQuest has continued to deliver excellent operational performance across our
asset portfolio during 2025, achieving Group production efficiency in excess
of 90%. Production for the first quarter of the year, excluding pro forma
Vietnam volumes, averaged 42.0 Kboed and remained ahead of our guidance range.

"Through strong reservoir management and good infill drilling results, in
April we delivered Magnus oil production of 16,800 barrels per day, the
highest rate since 2022. Due to a pipeline system outage, Magnus production
was shut-in later in April, with remediation actions at the
third-party-operated Ninian Central Platform now complete and production
restored. The third infill well in the 2025 drilling programme will be brought
online in June and, with strong rates expected, will add to the excellent
performance being delivered from Magnus. Accordingly, our production guidance
of 40,000 to 45,000 Boepd, including pro forma Vietnam volumes, remains
unchanged

"The recent stepdown in commodity prices has further amplified calls for the
UK government to remove the Energy Profits Levy and return the North Sea to a
position of global competitiveness. The status quo, which sees the UK as the
only country levying a windfall tax on homegrown energy producers, where no
windfall profits exist, is resulting in irreversible damage to this strategic
national industry and is driving job losses across the sector. We remain
focused on optimising our cost base to drive further efficiency, commensurate
with a low commodity price environment. We have a strong track record of
managing expenditure during times of low oil prices and will apply the same
disciplined approach to our investment plans over the next 18 months.

"That discipline is also reflected in the way we have repositioned our balance
sheet, which now provides a robust platform from which to grow our business.
The diversified growth we have already delivered in South East Asia is
creating a better balance within our portfolio and brings significant future
opportunity. We remain focused on delivering a material UK transaction in the
short term, and we are resolute in our belief that our relative advantages,
both operational and fiscal, see us ideally placed as a North Sea
consolidator."

 

2025 performance

§     Group production averaged 42,028 Boepd for the first quarter of
2025.

§     Magnus production reinstated, incorporating additional volumes from
successful infill drilling, well interventions and well optimisation work
undertaken during the c. four-week outage of pipeline system infrastructure.

§     Having completed key maintenance scopes during the outage, the H2
2025 seven-day maintenance shutdown is no longer required. Accordingly, the
next planned shutdown at Magnus will be in 2026.

§     The Group is focused on optimising operational activity in the
second half of 2025, and beyond, to prioritise safety-critical and
production-enhancing scopes; noting that 2025 capital activities were
predominantly weighted in the first half of the year.

 

South East Asia- Delivering diversified growth

§     The Group has announced several key growth initiatives across South
East Asia in recent months, including the award of the DEWA PSC, securing the
Seligi 1b gas agreement, the acquisition of Block 12W assets in Vietnam and,
most recently, the successful PSC awards at Gaea and Gaea II in Indonesia.

§     Organic and transactional growth in the region already provides a
pathway for EnQuest to grow its South East Asian production to more than
35,000 Boepd by the end of the decade.

§     Beyond this, EnQuest sees significant upside across its existing
Asia portfolio, and is in advanced discussions around a further new country
entry.

 

Liquidity and net debt

§     Net debt c.$405 million at 30 April 2025; represents an increase of
c.$19 million since 31 December 2024, primarily driven by the phasing of
liftings and extensive 1H 2025 capital activity.

§     Completion of the acquisition of Harbour Energy's Vietnam business
is expected within six weeks.

§     UK Energy Profits Levy payment of c.$100 million planned during June
2025.

§     With the majority of Group tax payments being made in H1 2025, as
well as ongoing cost optimisation efforts, the Group will benefit from reduced
cash outflows in the second half of the year.

§     Having secured a 34% uplift in the Group's Reserve Based Lending
capacity in its year-end redetermination, Group cash and undrawn facilities at
30 April totalled c.$534 million. This provides a platform for
transformational transactional growth, enhanced by EnQuest's advantaged UK tax
position.

 

2025 guidance and outlook unchanged

§     Production guidance: 40,000 Boepd to 45,000 Boepd, including pro
forma Vietnam production.

§     Cash capital expenditure to total c.$190 million; operating
expenditure to total c.$450 million; and decommissioning expenditure to total
c.$60 million, all on a pro forma basis.

§     Programme of operating cost reductions is ongoing - focused on
maintaining production, maximising cash flow, driving capital efficiency,
reducing future emissions and enhancing core value.

§     EnQuest remains focused on delivering transformative growth within
its North Sea business and is in ongoing discussions with multiple UK
counter-parties.

 

2025 Annual General Meeting

§     Subject to shareholder approval at today's Annual General Meeting
('AGM'), the Group will pay its $15 million dividend (0.616 pence per share)
during June 2025.

 

Ends

 

For further information please contact:

 

 EnQuest PLC                                                      Tel: +44 (0)20 7925 4900
 Amjad Bseisu (Chief Executive Officer)
 Jonathan Copus (Chief Financial Officer)
 Craig Baxter (Head of Investor Relations and Corporate Affairs)

 Teneo                                                            Tel: +44 (0)20 7353 4200
 Martin Robinson
 Harry Cameron

 

Notes to editors

ENQUEST

EnQuest is providing creative solutions through the energy transition. As an
independent energy company with operations in the UK North Sea and Malaysia,
the Group's strategic vision is to be the partner of choice for the
responsible management of existing energy assets, applying its core
capabilities to create value through the transition.

EnQuest PLC trades on the London Stock Exchange.

Please visit our website www.enquest.com (http://www.enquest.com) for more
information on our global operations.

Forward-looking statements: This announcement may contain certain
forward-looking statements with respect to EnQuest's expectations and plans,
strategy, management's objectives, future performance, production, reserves,
costs, revenues and other trend information. These statements and forecasts
involve risk and uncertainty because they relate to events and depend upon
circumstances that may occur in the future. There are a number of factors
which could cause actual results or developments to differ materially from
those expressed or implied by these forward-looking statements and forecasts.
The statements have been made with reference to forecast price changes,
economic conditions and the current regulatory environment. Nothing in this
announcement should be construed as a profit forecast. Past share performance
cannot be relied upon as a guide to future performance.

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