Strong production supports full year 2020 guidance with forecast free cash flow1 breakeven unchanged at c.$33/Boe
Strong production performance
- Group production averaged 65,938 Boepd in the four months to end April 2020, above the top end of the Group’s full year 2020 production guidance, which remains unchanged at between 57,000 Boepd to 63,000 Boepd
- Group performance remains materially unaffected by COVID-19
- Kraken average gross production of c.38,000 Bopd, up c.36% year on year reflecting improved FPSO performance and continued strong reservoir and well performance
- Better than expected performance from Scolty/Crathes
- Magnus wells completed and onstream in March
Effective liquidity management
- At 30 April 2020, net debt including PIK reduced further to $1,364 million (end 2019: $1,413 million), with cash and available facilities amounting to $289 million (end 2019: $289 million)
- No senior credit facility amortisations due in 2020
- For the full year, EnQuest has hedged approximately 8.1 MMbbls of oil, or c.40% of entitlement production, with an average price of c.$45/bbl
On track to deliver in 2020 and beyond
- Implementation of 2020 cost savings on track; forecast free cash flow1 breakeven remains unchanged at c.$33/Boe for 2020, which equates to c.$25/Boe for the remainder of the year
- Continue to target free cash flow breakeven of c.$27/Boe for 2021
1 Free cash flow: net change in cash and cash equivalents less net (repayments)/proceeds from loan facilities. $/Boe based on working interest production
EnQuest Chief Executive, Amjad Bseisu, said :
“EnQuest has responded well to the challenges of COVID-19 and the downturn in oil prices.
“Our continued focus on operational excellence has ensured our operations remain materially unaffected by the ongoing COVID-19 pandemic. Performance at Kraken and Scolty/Crathes has been ahead of expectations, while production at Magnus and PM8/Seligi has also been good, with the two new wells drilled on Magnus coming onstream in March.
“We also took decisive, early action to reduce costs and the implementation of our cost reduction programme is progressing well.
“With the strong performance in the year to date and continued focus on delivering our cost programme, we expect that for the remainder of the year we need to realise an average oil price of around $25/Boe to achieve free cash flow breakeven, and remain confident in meeting our targets.”
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