EnQuest Raises GBP107 Million to Fund Acquisition; 1st Half Net Profit Rose 48%

By Oliver Griffin

EnQuest PLC (ENQ.LN) said Friday that it will raise 107 million pounds ($138.3 million) in a rights issue to fund its acquisition of BP PLC's (BP.LN) remaining interest in the Magnus field, and it reported a 48% rise in first-half net profit.

The oil-and-gas company said the total price for BP's remaining interest in the field is $300 million. The rights issue will be used to fund the base consideration, while the remaining expense will be paid to BP from the net cash flow generated by the newly acquired interest.

To raise the GBP107 million, EnQuest said it will issue 508.3 million new shares to existing shareholders in a three-for-seven rights issue, at a price of 21 pence a share.

EnQuest initially acquired a 25% interest in the Magnus field in January, when it retained the option to acquire the remaining interest and increase its stake in the field. The company said it will raise an additional $27 million to fund the development of the Canute infill well, and the T10/T11 infill well on the Magnus field.

The company said profit in the six months ended June 30 rose to $43.3 million, from $29.3 million in the year-earlier period, on revenue that grew 61% to $550.8 million. During the first half, average production increased 46% to 53,990 barrels of oil equivalent a day, EnQuest said.

As well as exercising its option at the Magnus field, EnQuest said it plans to exercise an option regarding its agreement with BP to perform the physical decommissioning activities of the Thistle and Deveron North Sea oil fields.

By exercising the option, EnQuest will now increase its payment for decommissioning by $20 million, to a total of $50 million, and has agreed to increase its payment obligation to 7.5% of BP's decommissioning costs, which has an increased cap of GBP99 million.

The company reiterated its full-year production guidance of between 50,000-58,000 barrels of oil equivalent a day.

Write to Oliver Griffin at [e-mail]; @OliGGriffin

(END) Dow Jones Newswires

September 07, 2018 02:58 ET (06:58 GMT)

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