Enquest ‘disappointed’ with windfall tax plans as revenue dips
North Sea energy firm Enquest has said it was “disappointed” with the ongoing application of the Energy Profit Energy as it reported falls in production and revenue.
Enquest, which is one of the largest operators in the North Sea and is currently drilling the single largest oil field in the area, reported a 19.8 per cent decline in revenue to $587.9m (£447.2m) in the six months 30 June.
Production was down six per cent, to 42,771 barrels of oil equivalent per day (boepd) from 45,480 boepd the year prior.
It said it remained on track to deliver its previous guidance of between 41,000 and 45,000 when it reports its full results early next year.
However, due to a late start on its Magnus well, the company said it expected production to come in at the lower end of that guidance.
Amjad Bseisu, Enquest’s chief executive, also used the results to criticise the government’s plans for the windfall tax – known as the Energy Profits Levy – currently being applied to energy firms with operations in the North Sea.
The tax has been the subject of staunch resistance from the sector, with the industry’s trade body warning the government’s current plans could cost the UK economy £13bn, and many firms in the sector signed an open letter railing against the reforms.
Bseisu, who founded the FTSE 250 firm in 2010 and is a high-profile Conservative Party donor, said he and his firm were “disappointed with the ongoing application of the Energy Profits Levy despite operating in an environment where no windfall conditions exist”.
He added: “The current fiscal regime is causing irreversible damage to an indigenous and strategically important UK industry.
“The UK energy industry needs a progressive tax regime that recognises the maturity of the North Sea and re-establishes the UK as a globally competitive investment basin.”
Free net cash flow at Enquest was down 60 per cent to $55m (£41m) in the first half of 2024, while its adjusted earnings before interest, debt, tax and amortisation fell by 7.9 per cent
Bseisu said of the results: “EnQuest has continued to deliver strong uptime performance across our portfolio in the first half of the year, with production to the end of June averaging 42.8 Kboepd.
“The Group’s growth strategy remains robust, with a focus on delivering a transformative UK acquisition; utilising our differentiated operating capability and significant tax asset to deliver material incremental value.”