North Sea oil and gas producer Enquest (ENQ) is the latest company to bear the wounds of the oil price rout as it reports a higher net debt figure than expected in its interim results. The shares drop 5.26% to 31.5p.
The figure of $1.28 billion reflects lower than anticipated operating cash flow of $83 million and higher than forecast capital expenditure of $386 million. Early in 2015 Enquest negotiated a relaxation of covenants on its lending facility and retail bond and management says it 'will be able to operate within the requirements of its existing borrowing facilities for 12 months from the date of approval of the half-year report'.
2015 production is guided at between 33,000 and 36,000 barrels of oil equivalent per day. First oil from the flagship Alma/Galia development is expected within weeks and Kraken is expected on stream in 2017.
Westhouse, which has a buy recommendation and 75p price target, comments: 'Solid results in what has been a difficult period for the sector. Positive that FY15 production guidance has been maintained and that the Alma/Galia and Kraken developments remain on track, however, we would be keeping a close eye on the cash flow performance as net debt at end June is higher than we had forecast.'