EnQuest Narrows Annual Output Forecast After Magnus Outage Despite Profit Rebound
EnQuest's Performance and Strategic Moves in 2024
By Ankita Bora
Production Forecast and Financial Results
Sept 3 (Reuters) - Britain's EnQuest narrowed its annual output forecast towards the lower end on Thursday blaming a five-week outage at its Magnus field, even as the North Sea-focused oil producer swung back to half-year profit.
The company tightened its expected 2026 production to 41,000 to 43,000 barrels of oil equivalent per day, from an earlier 41,000 to 45,000. First-half output rose 9% to 41,544 boepd.
EnQuest's shares were down 5% at 26 pence by 1131 GMT.
Expansion in Southeast Asia
The company has sought to expand its Southeast Asian portfolio as North Sea producers grapple with uncertainty over Britain's oil and gas policy. It agreed to buy interests in four offshore contracts in Malaysia for up to $833 million from state-run Petronas in June.
Impact of UK Political Changes
However, signals that new UK Prime Minister Andy Burnham's government wants to be more pragmatic about the country's oil and gas policy are offering a boost to the North Sea industry.
"You don't have to focus on one child; you can focus on many children. So we're focused on both Southeast Asia as well as the North Sea," CEO Amjad Bseisu told Reuters, although he added that the UK industry needed a lifeline.
UK Remains Core to EnQuest's Strategy
UK REMAINS CORE
"We are hopeful that the change in (UK) political leadership will be accompanied by a renewed focus on competitiveness, investment and energy security," Bseisu said in a statement.
He told CNBC that EnQuest was interested in BP's North Sea assets after the oil major put its UK North Sea business up for sale in July.
Industry Consolidation and Future Outlook
The North Sea has seen a wave of consolidation in recent years, including Shell and Equinor's creation of Adura.
The Malaysia acquisition will boost EnQuest's scale and diversification, without marking a retreat from the UK North Sea, Peel Hunt analyst Sam Wahab said in a note.
Financial Performance Highlights
The company posted an adjusted pretax profit of $54.6 million for the six months ended June 30, compared with a loss of $5.3 million last year.
(Reporting by Ankita Bora in Bengaluru; Editing by Mrigank Dhaniwala, Kirsten Donovan)
