EnQuest PLC on Thursday reported a considerable swing to profit for 2021, as higher oil prices more than offset lower output in fostering revenue growth.
Also on Thursday, the UK North Sea and Malaysia-focused oil and gas firm announced the departure of Chief Financial Officer Jonathan Swinney at a date to still be determined, to take up the same role at FTSE 250 peer Tullow Oil PLC.
Salman Malik, managing director for Corporate Development, Infrastructure & New Energy has been picked to succeed Swinney as CFO. Malik has been part of EnQuest for nine years since 2013.
‘Salman has been a member of our Executive Committee for a number of years and has a wealth of industry and financial experience. He led some of our most recent business development activities, particularly the Magnus and Golden Eagle transactions, which have added material value to the group. I look forward to continuing to work alongside Salman and am excited about driving further value creation for all our stakeholders,’ said Chief Executive Amjad Bseisu.
Shares in EnQuest were 8.3% higher at 31.62 pence on Thursday in London.
For 2021, EnQuest posted a pretax profit of $352.4 million, swinging sharply from a loss of $566.0 million the year before.
The company’s profit performance was helped mainly by a non-cash net impairment reversal of $39.7 million from a $422.5 million charge incurred in 2020, through an increase in the near and medium-term oil price and updated asset profiles.
In addition, revenue grew 54% in 2021 to $1.32 billion from $855.1 million the prior year, as the average realised oil price hiked 76% to $73.0 per barrel from $41.6 in 2020.
This more than offset a 25% decline in production to 44,415 barrels of oil equivalent per day from 59,116 barrels per day in 2020, as a result of an underperformance at the Magnus well on well integrity issues, in spite of higher uptime at Kraken and a Golden Eagle contribution.
Looking ahead, net production for 2022 has been guided to be between 44,000 and 51,000 boepd. For the year to date ended February, net production averaged 50,408 boepd.
‘We made good progress against our strategic objectives in 2021, concluding three acquisitions, refinancing our senior secured debt facility, generating significant free cash flow of $396.8 million and reducing our year end net debt to $1.22 billion, its lowest level since 2014. We have made strong progress on emissions reduction, which continues to be a focus for the group,’ Bseisu added.
‘With a supportive oil price environment and an active programme of nine wells and seven workovers in 2022, our largest sanctioned programme since 2014 and our first new wells in over two years, we remain confident on delivering a good performance this year.’
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