Enquest Plc · LSE:ENQ
Enquest — Enquest Plc Ord — H1 2023 Earnings Presentation
27 slides from Enquest's earnings presentation, Sep 5, 2023
Slide 1: 2023 Half Year Results
Page EnQuest 2023 Half Year Results 5 September 2023
Slide 2: Introduction
5 September 2023 Page 2 Introduction Amjad Bseisu Chief Executive Officer
Slide 3: Strong free cash flow driving debt reduction; providing platform for growth
5 September 2023 Page 3 Strong free cash flow driving debt reduction; providing platform for growth Achieved LTIF of 0.791 in first half of 2023 Production at 45,480 Boepd2 Successfully executing well programme at Magnus; Kraken production efficiently reinstated Deliver On track to meet guidance Fre
Slide 4: Providing creative solutions through the energy transition
5 September 2023 Page 4 Providing creative solutions through the energy transition Electrification CO2 storage Green Hydrogen UPSTREAM INFRASTRUCTURE & NEW ENERGY DECOMMISSIONING Responsibly optimising production, leveraging existing infrastructure and delivering energy security and decarbonisation
Slide 5: Infrastructure and New Energy: three key focus areas
5 September 2023 Page 5 Infrastructure and New Energy: three key focus areas Successful award of four carbon storage licences for the Magnus, EnQuest management of emissions1 Thistle, Tern and Eider fields in NSTA licensing round MT CO2e Jetties to be repurposed to accept liquid carbon, with tem
Slide 6: Financial review
5 September 2023 Page 6 Financial review Salman Malik Chief Financial Officer
Slide 7: Half year 2023 financial performance
5 September 2023 Page 7 Half year 2023 financial performance Revenue1 Unit opex Cash generated from Free cash flow2 operations c.$733 million c.$20/Boe c.$370 million c.$140 million 22% 13% 29% 59% Cash capital Cash decommissioning FCF/Boe3 Net debt4 expenditures expenditures c.$80 million c.$29 mil
Slide 8: Debt reduction driven by free cash flow of c.$140 million
5 September 2023 Page 8 Debt reduction driven by free cash flow of c.$140 million Movement in net debt $m Debt maturities extended to 2027 - RBL amortisation completed by April 2027 - Term loan facility bullet repayment July 2027 - GBP 9% retail bond maturity October 2027 - USD 11.625% high yield bo
Slide 9: EPL has changed the UK investment landscape
5 September 2023 Page 9 EPL has changed the UK investment landscape - Reduction in statutory profits – Introduced in June 2023 as price floor at which the - Reduced borrowing for RBL-funded companies EPL disapplied, if the following conditions met : - Lower free cash flow generation as cash is • Oil
Slide 10: Clear financial priorities focused on deleveraging
5 September 2023 Page 10 Clear financial priorities focused on deleveraging 2024 Financial Priorities 2022 YTD 2023 onwards 1 Reset capital structure 2 Continue to de-lever 3 Cost discipline and optimising capital programme 4 Unlock accretive M&A and growth in energy transition 5 Sha
Slide 11: On track to deliver 2023 guidance
5 September 2023 Page 11 On track to deliver 2023 guidance 2023 1H 2023 Guidance Performance 42.0 - 46.0 Focused drilling and well work, maintain high uptime Production 45.5 kboed kboed across portfolio, following return to production at Kraken Operating c.$425m c.$163m Maintaining a strong focus on
Slide 12: Operations overview
5 September 2023 Page 12 Operations overview Richard Hall Chief Operating Officer
Slide 13: Efficient reinstatement of Kraken production, high uptime across portfolio
5 September 2023 Page 13 Efficient reinstatement of Kraken production, high uptime across portfolio Group production in line with guidance - Kraken production returned to service ahead of 19,527 schedule following HSP transformer outage 49,726 - Magnus production reflects production uptime 45,480 16
Slide 14: Kraken returned to production efficiently; Magnus well work on track
5 September 2023 Page 14 Kraken returned to production efficiently; Magnus well work on track Kraken Magnus 1H 2023 1H 2023 - Production adversely impacted by topside HSP transformer unit - Production efficiency of 91% failures during May - Well work programme ongoing - 22 day shutdown, following by
Slide 15: Golden Eagle shutdown optimised; GKA delivering high uptime
5 September 2023 Page 15 Golden Eagle shutdown optimised; GKA delivering high uptime Golden Eagle Other UK Upstream Greater Kittiwake Area | Scolty/Crathes | Alba 1H 2023 1H 2023 - Production efficiency of 91% - GKA including Scolty/Crathes - Delayed 2022 infill well completed, with first oil in Jun
Slide 16: PM8/Seligi production driven by successful well programmes
5 September 2023 Page 16 PM8/Seligi production driven by successful well programmes Malaysia PM8/Seligi | PM409 1H 2023 - Production efficiency of 92% - Planned workover programme ongoing with two wells completed in first half of 2023; production in line with expectations - Agreement signed with Pet
Slide 17: Repurposing and decommissioning infrastructure
5 September 2023 Page 17 Repurposing and decommissioning infrastructure Right-sizing and repurposing SVT | Upstream assets 1H 2023 - Developing cost-effective and capital-efficient plans to right-size the SVT site - Procurement and site preparation activities have commenced for the New Stabilisation
Slide 18: Looking forward
5 September 2023 Page 18 Looking forward Amjad Bseisu Chief Executive Officer
Slide 19: Pursuing capability-led M&A opportunities
5 September 2023 Page 19 Pursuing capability-led M&A opportunities Operating capability Advantaged tax position in the UK - Improve production efficiency - c.$2.3 billion of recognised tax losses - Lower costs and emissions Unlocking Decommissioning excellence Innovative structures to drive value va
Slide 20: Proven capabilities underpin our aspiration
5 September 2023 Page 20 Proven capabilities underpin our aspiration 1 Strong operational performance, maximising value from existing asset base 2 Strengthened balance sheet, with extended debt maturity profile 3 Committed to Net Zero by 2040, underpinned by position as a key player in energy transi
Slide 21: Q&A
Page Q&A
Slide 22: Our proof points
5 September 2023 Page 22 Our proof points • >10 years extension in Magnus life • Protected barrels by sourcing critical Excellence in operating from acquisition Experience in repurposing spares from around the world • Proven ability to vastly improve PE; A safely and extending life of E assets, in c
Slide 23: Operator of choice for maturing hydrocarbon assets
5 September 2023 Page 23 Operator of choice for maturing hydrocarbon assets Production breakdown1 Annual production CAGR of c.10% since IPO 80,000 Malaysia 8.2 kboed 18% 60,000 40,000 UK 37.3 kboed 82% 20,000 0 1 Year to date June 2023 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Slide 24: Portfolio opportunity set aligned to capabilities
5 September 2023 Page 24 Portfolio opportunity set aligned to capabilities Maximising value from existing assets Magnus Kraken GEAD PM8/Seligi - Multi-year low-cost well - Infill and western area - Multi-year well - Multi-year low cost well programmes drilling programmes programmes - Gas opportunity
Slide 25: Significant tax losses available to offset CT/SCT
5 September 2023 Page 25 Significant tax losses available to offset CT/SCT UK Tax losses $m Tax losses at 31 December 2022 2,497.7 HY2023 net decrease (178.9) Tax losses at 30 June 2022 2,318.8 - 2023 decrease driven by tax losses utilised against taxable profits in the period - No material CT/SCT c
Slide 26: Effective tax reconciliation
5 September 2023 Page 26 Effective tax reconciliation % $m Profit Before Tax 112.9 Notional UK Corporation Tax (40.0)% (45.2) UK and overseas tax rate differences (21.7) Permanent items (20.4) Energy Profits Levy (55.0) Other 8.2 Tax Charge (118.8)% (134.1)
Slide 27: Forward-looking statements
5 September 2023 Page 27 Forward-looking statements This presentation may contain certain forward-looking statements with respect to EnQuest’s expectation and plans, strategy, management’s objectives, future performance, production, costs, revenues, reserves and other trend information. These statem