EnQuest, an independent oil and gas exploration and production company has said it will slash its 2015 capital investments.
Back in November 2014, EnQuest said the indicative level for capital investment for the North Sea in 2015 was expected to be in the range of $700 million to $800 million, with an additional amount for international projects.
Responding to the falling oil prices EnQuest has said that total Group cash capital expenditure in 2015 is now expected to be in the region of $600 million, including international, with capital expenditure reductions from both new developments and existing fields. This is a reduction of more than 40% compared to the business plan before the steep fall in oil prices.
“Control of the cost base has always been a focus for EnQuest and in this new macro environment, it is continuing to work with the supply chain and contractors to achieve additional cost savings,” the company said in an update.
Developments on time
The company is working to develop Alma/Galia and Kraken fields in the UK North Sea. It said that both projects remained on schedule.
On Alma/Galia, mechanical completion on the the FPSO EnQuest Producer was achieved before Christmas and sailaway continues to be expected in March. The project remains on track for first oil in mid-2015.
Amjad Bseisu, Chief Executive, EnQuest PLC said: “The rapid change in the macro environment with respect to the oil price has affected all in the industry, not least EnQuest. However, with our strong production growth, the new developments coming on stream in the next two years and our available $1.1 billion in funding under our facilities, we continue to demonstrate the strength and sustainability of EnQuest’s production growth model.
Production to rise
In 2014, EnQuest said it achieved provisional production for 2014 at the top end of its guidance range, 28,267 Boepd, up 17% on 2013. Revenue is expected to exceed $950 million and EBITDA is expected to be in the range of $530 million to $580 million.
For this year, EnQuest expects a ramp up in production, boosted by Alma/Galia coming on stream in the middle of 2015 and full year’s contribution from its Malaysian assets.
The company said its average production for 2015 is expected to be between 33,000 Boepd and 36,000 Boepd, on a working interest basis.
Bseisu added: “I am very pleased that our production efficiency for 2014 has been approximately 90%, which is an exceptional performance and ranks EnQuest as one of the best operators in the North Sea. The business continues to perform very well operationally and is on course for another year of strong production growth.”