EnQuest appoints Lennox; profit up 51% to $150m

Jock Lennox

North Sea exploration firm EnQuest said its pre-tax profit rose 51% to $149.7 million on revenue and other operating income down 12% to $391.3 million in the six months to June 30 — and the company said it continues to hold “constructive discussions with its main debt and credit providers.”

EnQuest also appointed veteran businessman Jock Lennox as its new chairman to succeed Jim Buckee who is retiring.

EnQuest said in July it was in talks to sell a 20% stake in the massive Kraken development east of Shetland to Israel’s Delek Group in a deal said to be worth up to $162 million.

But Reuters reported on Thursday that EnQuest chief executive Amjad Bseisu said that announcement had been “a mistake” and that talks with other potential partners are also continuing.

“We’re not exclusively talking to Delek,” he told Reuters.

EnQuest lowered its 2016 production forecast from 44,000 to 48,000 barrels of oil equivalent per day (bpd) to between 42,000 and 44,000 bpd amid teething problems at its Alma/Galia field.

EnQuest shares fell about 2.5%.

Lennox, appointed to the EnQuest board in February 2010, is a former EY partner and is a non-executive director of Dixons Carphone, Hill & Smith Holdings and A&J Mucklow Group.

Lennox is also senior independent director of Oxford Instruments. He will retired from the boards of Oxford Instruments and A&J Mucklow in September 2016 and November 2016 respectively.

“EnQuest remains focused on monitoring and managing its funding position and liquidity, continuing strategic priorities in this low oil price environment,” said the firm in its half-year report.

“In this context, EnQuest has continued to take action to implement cost saving programmes, both to reduce and rephase planned operational expenditure, general and administrative spend and capital expenditure.

“EnQuest is also pursuing a number of additional funding options, to ensure adequate liquidity continues to be available. 

“EnQuest is holding constructive discussions with its main debt and credit providers, or their representatives, concerning proposals for accommodations including to amend the structure, covenants, interest payment obligations, maturities and other aspects of its debt.

“The RCF lenders continue to be supportive and have provided waivers when required.”

Lennox said: “EnQuest has a very strong team of people and an asset base which has material growth potential. 

“Operationally, EnQuest has been working hard and is performing well in addressing the challenges of the prevailing level of oil prices. 

“It has the high efficiency and low cost capabilities required to cope with these macro conditions and even modest increases in oil prices would have a significant positive impact on future cash flows and growth. 

“Currently, EnQuest’s priority continues to be to to deliver a business and a balance sheet which are robust in this environment and I am very pleased to be becoming chairman at this important time in the company’s development.”