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Opinion: No Opinion
Posted: September 12, 2018
EnQuest aborted sales talks for Kraken stake due to debt deadline - sources
EnQuest switched from plans to sell a stake in its flagship North Sea oilfield to borrowing money against it after two sets of sale talks had to be abandoned as a deadline for a debt repayment approached, industry and banking sources said.
* Bids from Polish entity, private group abandoned - sources
* EnQuest $2 bln net debt more than 3 times market value
* Opted for loan against ringfenced stake instead of sale (Updates paragraph 10 on debt position)
By Ron Bousso and Shadia Nasralla
LONDON, Sept 12 (Reuters) - EnQuest switched from plans to sell a stake in its flagship North Sea oilfield to borrowing money against it after two sets of sale talks had to be abandoned as a deadline for a debt repayment approached, industry and banking sources said.
EnQuest, with almost $2 billion in debt, launched earlier this year the sale of a 20 percent stake in the heavy oil Kraken field, one of the largest North Sea developments which started production in June last year.
The sale of the stake would have pumped welcome cash into the coffers of the company which has to pay back just under $200 million in debt in October.
The sale process, initially expected to raise up to $400 million, was run by investment bank Jefferies.
London-based EnQuest received an offer for a stake in Kraken from Lotos, a Polish state-backed oil and gas company, several months ago, according to the sources.
The talks reached advanced stages, but dragged on and could not be concluded in time, according to one source.
Lotos declined to comment.
A second offer from a private company was rejected by EnQuest after the bidder revised its terms at the last minute, the sources said.
After the two failed approaches, EnQuest decided to borrow $175 million against 15 percent of Kraken's cashflow from Oz (Och-Ziff) Management to be paid back within five years.
The move came as the company is saddled with net debt which stood at $1.97 billion at the end of June. Its market value is around $564 million.
"There was very significant interest in the farm-out process for Kraken and we received a number of offers from both industry participants and financial institutions," EnQuest said in a statement to Reuters.
"The financing agreement with Oz Management was selected as the preferred economic option for EnQuest at this time, allowing us to retain significant exposure to the upside potential on Kraken."
EnQuest, which specialises in squeezing more barrels out of ageing fields, holds 70.5 percent of the Kraken field while Cairn Energy owns the rest.
Oil production from Kraken averaged 31,000 barrels per day (bpd) in the first six months of 2018, slightly below expectations due to issues with water injection to increase oil recovery and bad weather.
It has since picked up to as much as 36,000 bpd. Earlier this year, it had reached as much as 50,000 bpd.
EnQuest shares tumbled around 13 percent on Friday after the company announced a discounted share issue to buy the remaining 75 percent in the Magnus oilfield from BP to shore up future output.
Its next debt repayments are $175 million due in April and $100 million in October 2019, it said on Friday.
"The concern with Enquest's equity value remains its sensitivity to $1.97 billion of net debt ... we cannot rule out future approaches to the market," Jefferies said in a note on Monday. (Editing by Mark Potter)
Opinion: No Opinion
Posted: January 31, 2018
RNS Number : 4064D
31 January 2018
ENQUEST PLC, 31 January 2018.
AGREEMENT WITH BP ON THISTLE DECOMMISSIONING
Following the completion of the acquisition of an initial 25% interest in the Magnus oil field on 1 December 2017, EnQuest PLC ('EnQuest') is pleased to announce it has agreed with BP to undertake the management of the physical decommissioning activities for Thistle and Deveron.
Under the terms of this agreement with BP:
· EnQuest will receive $30 million in cash in exchange for undertaking the management of the physical decommissioning and making payments by reference to 3.7% of the gross decommissioning costs of the Thistle and Deveron fields when spend commences, subject to a cap of £57 million. EnQuest's current estimate of its exposure to decommissioning costs is lower than the $30 million cash being received; and
· EnQuest will also have an option, exercisable over a 12 month period, to receive a further $20 million in cash in exchange for making additional payments by reference to 2.4% of the gross decommissioning costs of these fields, subject to a cap of £42 million.
The transaction aligns the interests of the parties involved in the production and decommissioning phases, reflecting the industrial logic for the operator to undertake the decommissioning of these assets.
Opinion: No Opinion
Posted: December 11, 2017
RNS Number : 8940Y
11 December 2017
ENQUEST PLC, 11 December 2017.
EnQuest PLC ('EnQuest') announces that Neil McCulloch is stepping down today as Chief Operating Officer and Executive Director of EnQuest PLC by mutual agreement.
EnQuest has appointed Faysal Hamza as Interim Head of North Sea and Bob Davenport as Managing Director, North Sea, reporting to Faysal. Prior to joining EnQuest, Bob successfully led Apache's North Sea operations. Faysal and Bob previously worked together to build EnQuest's successful business in Malaysia. John Penrose will replace Bob as Managing Director, Malaysia.
Jock Lennox, Chairman of EnQuest:
"The Board would like to thank Neil for his unstinting contribution to EnQuest during a challenging period for both the company and industry. We wish him well for the future."
Opinion: No Opinion
Posted: December 1, 2017
RNS Number : 0693Y
01 December 2017
ENQUEST PLC, 1 December 2017.
ACQUISITION OF 25% INTEREST IN THE MAGNUS OIL FIELD COMPLETED
EnQuest PLC ('EnQuest') today announces that it has completed the acquisition of an initial 25% interest in the Magnus oil field ('Magnus'), a 3.0% interest in the Sullom Voe Oil terminal and supply facility ('SVT') and additional interests in associated infrastructure from BP as planned. EnQuest is now the operator of both Magnus and SVT.
This acquisition and the associated details of the transaction were originally announced on 24 January 2017.