The Enquest Plc (LON: ENQ) share price declined 17% after the company reported that its revenues and other operating income fell to $732.7 million from $943.5 million. Its adjusted pretax profits fell to $399.2 million from $536.3 million in 2022.
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The adverse investor reaction to the news released can be directly attributed to the lower revenues and profits. The company attributed the lower revenues to lower realised oil prices of $75.8/Boe compared to $89.9/Boe in 2022 and lower production. The group’s net production averaged 45,480 Boepd versus 49,726 Boepd in 2022.
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The company’s operating costs fell to $162.7 million compared to $208.4 million due to the higher lease charter credits and an unplanned downtime at Kraken. The company also had lower well maintenance and intervention costs at Magnus and PM8/Seligi.
Enquest’s reported profit before tax fell to $112.9 million versus the $182.6 million recorded in 2022. The reported loss after tax was $21.2 million versus the 2022 profit of $203.5 million due to the impact of the UK Energy Profits Levy. The North Sea Transition Authority also awarded the company four carbon storage licenses.
The company reiterated its 2023 production targets, expected from 42,000 to 46,000 Boepd, due to the solid first-half performance across most of its portfolio and Kraken’s return to service. The company incurred losses after shutting in Kraken to accelerate maintenance work previously planned for Q3 2023.
EnQuest CEO Amjad Bseisu said: “Strong operational performance, including the efficient return to service of Kraken, has enabled free cash flow generation totalling $140 million in the first half of 2023, driving a further reduction in EnQuest net debt to $592 million. Within the core business, we have a significant work programme in the second half of the year, including further drilling at Magnus and Golden Eagle and a continuation of well plug and abandonment activities at Heather and Thistle, which we expect to deliver in line with 2023 guidance. EnQuest continues to play an active role in supporting the UK's twin objectives of delivering energy security and decarbonisation.”
Enquest share price.
The Enquest share price declined 16.99% to trade at 14.51p from Monday’s closing price of 17.48p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.