EnQuest shares fall amid $325m North Sea purchase

Shares of oil and gas producer EnQuest plc fell about 8% on Thursday after it agreed to buy Suncor’s 26.69% equity interest in the Golden Eagle development in the UK North Sea for an initial consideration of $325 million.

EnQuest said it plans to finance the transaction through a combination of a new secured debt facility, “interim period post-tax cash flows” — and an equity raise of up to $50 million.

EnQuest CEO Amjad Bseisu said: “We are delighted we have agreed the acquisition of a material interest in Golden Eagle, a high-quality, low-cost UK North Sea development.

“Upon completion, this acquisition will add immediate material production and cash flow to EnQuest and will allow us to accelerate use of our substantial tax losses.

“It also demonstrates our continued commitment to the UK North Sea and diversifies our existing production base.

“The assets have a strong safety record and a lower than average CO2e emissions intensity ratio.

“We look forward to a productive partnership with the operator, CNOOC and our future joint venture partners, NEO Energy and ONE DYAS.”

In a separate stock exchange statement, EnQuest said its production dropped about 14% to 59,116 boe per day in 2020, reflecting field shutdowns and natural decline.

The figure is expected to slide further in 2021, to be between 46,000 and 52,000 boe per day.

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Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.