Business

Oil firm hails performance of field off Shetland

NORTH Sea-focused EnQuest is on the alert for growth opportunities after nearly doubling the amount of cash it generated last year.

The company said it delivered free cash flow of around $395m (£290m) last year, against $210m in 2020.

The increase reflects the scale of the boost provided to North Sea firms by the surge in oil and gas prices last year.

READ MORE: North Sea firms plan huge payouts to investors

EnQuest’s average production fell to 44,415 barrels oil equivalent daily in 2021, from 59,116 boed in the preceding year.

However, the average price it received for its output increased to $69 per barrel oil equivalent, from $41.3/bbl in 2020.

The fall in production came after the company faced challenges on the Magnus field, which it acquired from BP in 2018. EnQuest recently completed work on a programme to boost output from Magnus.

HeraldScotland: EnQuest chief executive Amjad BseisuEnQuest chief executive Amjad Bseisu

The company appears to remain confident that it can generate value for shareholders by following a strategy that has involved buying assets that other firms cooled on and developing finds.

EnQuest highlighted a strong performance by the Kraken field off Shetland which it brought onstream in 2017. The company also noted it enjoyed the benefit of production from the Golden Eagle assets bought from Canada’s Suncor last year in a deal that could be worth up to $375m.

READ MORE: Plans to develop billion barrels oil field off Shetland set to be revived

In an update on 2021 trading, chief executive Amjad Bseisu indicated the company could invest in increasing production from existing assets and in mergers and acquisition activity to capitalise on buoyant oil and gas market conditions.

He said: “The supportive macro environment and higher oil prices allow us to look forward to organic growth to offset natural declines.” This could involve investing in the firm’s “low-cost, quick payback well portfolio” and considering M&A opportunities.

EnQuest produced an average 5,028 boed in Malaysia last year, against 6,436 boed in 2020.

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