EnQuest Cuts 2013 Production Forecast due to Brent Shutdown
North Sea-focused independent EnQuest reported Wednesday that it has reduced its guidance for production during the whole of 2013 by approximately 1,000 barrels of oil equivalent per day (boepd), mainly as a result of shutdowns involving the Brent pipeline during the first quarter.
Reporting its results for 2012, EnQuest said that it now expects average production for 2013 to come in at between 22,000 boepd and 27,000 boepd. For 2012, EnQuest reported average production of 22,802 boepd – down 3.8 percent on 2011.
Meanwhile, the firm added that it expects to drill 12 wells during 2013. These will include six production wells, three injection wells and three exploration/appraisal wells.
Capital expenditure for 2013 is expected to be approximately $750 million, with around $350 million invested in EnQuest's Alma/Galia development located on the P1825 license, Block 30/24b, in the UK North Sea. The development is scheduled to begin in 4Q 2013.
$75 million has been earmarked as pre-development expenditure for the North Sea's Kraken development prior to the submission of the project's field development plan. First oil from Kraken is targeted for 2016.
Appraisal wells will be drilled at Cairngorm and Kraken during 2013, while the firm also expects to drill an exploration/appraisal well in the Sabah area, offshore Malaysia.
Oil sector analysts at JPMorgan Cazenove noted that the Alma/Galia and Kraken projects remain on track. "These major projects at the main drivers behind EnQuest's medium term production growth, and they reduce EnQuest's reliance on third party infrastructure," they said.
EnQuest's results for 2012 showed that the firm's proved and probable reserves stood at 128.6 million barrels of oil equivalent at the start of 2013 – an 11-percent increase compared with the start of 2012. Meanwhile, the firm's UK production licenses increased from 22 at the start of 2012 to 39 by the end of the year – with 11 licenses coming from the UK's 27th Licensing Round.
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