Oil driller Enquest shares fall despite hitting upper end of guidance

Shares took a beating at North Sea driller Enquest this morning despite the company hitting the upper end of its production guidance.

Output rose 25 per cent in the first four months of the year, to 69,973 barrels of oil equivalent per day, just below the upper ceiling of its 63,000 to 70,000 barrel 2019 guidance.

Read more: Enquest rebounds as production is set to increase at Kraken oil field

However, shares were down 8.5 per cent to 20.96p in early trading.

The firm’s significant $1.744bn (£1.4bn) net debt was only reduced by $50m to £1.724bn, despite high production and rising oil prices.

Meanwhile, Enquest said it expects to spend around $275m on its projects in the year. It kept production guidance unchanged.

The firm was forced to fight fires earlier this year after its joint partner at the Kraken oil field slashed the forecast for the field.

Cairn said it expected an impairment of $166m from Kraken, sending shares at Enquest down 13 per cent.

Read more: Enquest firefights after Cairn revises figures for North Sea joint venture

Just weeks later Enquest said it in fact expected gross production to hit between 30,000 and 35,000 barrels per day at the field. Production in the first four months hit 19,772 barrels it said today.

“The group has made a good start to 2019. Production is towards the top end of our full year guidance range, our capital programme is on track and we have continued to generate strong cash flows and reduce our debt,” said Enquest’s chief executive Amjad Bseisu.