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Enquest swings to profit on higher oil prices, Magnus acquisition

By BFN News | 09:39 AM | Thursday 21 March, 2019

Enquest swung to profit as revenues were bolstered by a ramp up in crude output, higher oil prices and the acquisition of Magnus. For the 12 months ended December, the company reported profit before tax of $127.3m from a loss of $60.8 a year earlier and revenue surged 94.3% to $1,201.0m. Production increased by 48% and averaged 55,447 barrels of oil a day, just above the midpoint of guidance of 50,000 barrels a day to 58,000 barrels a day. Revenue, which predominantly derived from crude oil sales higher was boosted by a material increase in volumes and higher realised prices. Revenue from the sale of condensate and gas was $43.1m, well above $2.8m reported last year as a result of increased gas sales from recently acquired Magnus. The group's blended average realised oil price rose to $61.2/bbl in 2018, from $52.2/bbl a year earlier. Excluding this hedging impact, the average realised oil price rose 22.8% to $66.2/bbl in 2018 year on year. Operating expenditures increased by 33.4% $465.9m, reflecting the full year contribution of Kraken and Magnus, partly offset by the benefit of a weaker sterling exchange rate, the company said. 'FPSO performance has been the main limiting factor in achieving Kraken's full production potential. As such, our clear operational priority is to improve Kraken's FPSO uptime and efficiency. We are working with the FPSO operator on a number of improvement initiatives,' the company said. 'The acquisition of Magnus has added material value to the business through significant production and reserve growth, and the application of our production enhancing capabilities are already improving performance above original expectations,' the company said. For 2019, average Group production expected to grow by around 20% to between 63,000 to 70,000 Boepd, cash capital expenditures was expected to be approximately $275m and approximately 6.5 million barrels were hedged at an average floor price of about $66 per barrel the company said. 'In the near term, we remain focused on investing in short-cycle projects which maximise cash flow and allow us to deliver on our plans to reduce our debt. We have opportunities for low-cost material growth in near-field, short-cycle infill and tie-back investments, particularly at Magnus, PM8/Seligi and Kraken.' At 9:39am: (LON:ENQ) EnQuest Plc share price was +2.38p at 20.02p Story provided by

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