Enquest Plc · LSE:ENQ
Enquest — H1 2011 Earnings Presentation
43 slides from Enquest's earnings presentation, Aug 12, 2011
Slide 1: EnQuest PLC 2011 Half Year Results
EnQuest PLC 2011 Half Year Results Main title Sub-title Delivering Growth, Strong Cash Flow, footer and On Target Production 1
Slide 2: Agenda
Agenda • Overview & Strategy CEO, Amjad Bseisu • Financials CFO, Jonathan Swinney • Operations COO, Nigel Hares • Summary CEO, Amjad Bseisu 2
Slide 3: Overview & Strategy
EnQuest PLC Overview & Strategy Amjad Bseisu CEO
Slide 4: Highlights: Strong cash flow, production on track
Highlights: Strong cash flow, production on track Half year to 30 June 2011, US dollars • 35% increase in production to 25,210 Boepd, all three hubs showing good growth − Overall six well drilling programme delivered ahead of schedule, under budget and with good results • Reaffirming 26,500 Boepd 20
Slide 5: Delivering EnQuest's Strategy
Delivering EnQuest’s Strategy Development and Production § To become the UK's leading independent oil and gas development and production company Vision § To become a technical leader in integrated development § To maximise potential from existing fields and future developments in the UKCS § Innovati
Slide 6: EnQuest's North Sea Licences
EnQuest’s North Sea Licences 6
Slide 7: Production & Development Opportunities
Production & Development Opportunities Building our portfolio since IPO 2P Reserve Development 26th Start of 2010 Latest IPO Acquisition Exploration Assets. WI. Opportunities Round Thistle 99% 99% Elke Pilot Deveron 99% 99% Peik / Burdock Don 60% 60% Southwest Scolty West Don 27.77% 44.95% Alma Conr
Slide 8: 2011 First Half Operational Results
2011 First Half Operational Results Strong production growth, up 35% Net production (Boepd) 25,210 18,708 14,065 9,144 5,612 5,060 5,533 4,504 Thistle/Deveron The Dons Heather/Broom Total H1'10 H1'11 8
Slide 9: Track Record of Strong Production Growth
Track Record of Strong Production Growth 2011 target of 26,500 Boepd, a 95% increase since 2009 Average net production (Boepd) 26,500 target Up 26% 1,290 2011 Full Up 55% Year Up 34% 25,210 21,074 H1’11 13,613 10,150 2008 2009 2010 2011 9
Slide 10: Business Development in 2011
Business Development in 2011 Consolidated positions, increased interests and operatorship • Acquired 32% stake to take a majority interest and assumed operatorship of proposed Crawford development; sanction programme defined • Increased working interest in Broom field from 55% to 63% • Farmed into 4
Slide 11: Business Development
Business Development Crathes / Moon, close to Scolty Scolty Crathes Moon 11
Slide 12: Financial Highlights
EnQuest PLC Financial Highlights Jonathan Swinney Chief Financial Officer 12 12
Slide 13: Results Summary
Results Summary Half year to 30 June Unless otherwise stated, all figures are before exceptional items and depletion of fair value uplift and are in US dollars. Reported Pro-forma* Change US dollars 2011 2010 % Export production (Boepd) 25,210 18,708 35 Average realised price per barrel ($) 106.72**
Slide 14: Income Statement
Income Statement Half year to 30 June 2011 2010 US dollars Exceptional items and Reported Pro-forma Business performance depletion of fair value uplift $m $m $m $m Revenue 511.4 - 511.4 224.5 Cost of sales (279.0) (9.2) (288.2) (137.5) Gross profit 232.4 (9.2) 223.2 87.0 Exploration and evaluation e
Slide 15: Balance Sheet
Balance Sheet As at 30 June 2011 2010 US dollars $m $m ASSETS Non-current assets Property, plant and equipment 1,181 1,136 Goodwill 108 108 Intangible assets 13 12 Asset held for sale 4 10 Investments 9 - Deferred tax asset 3 9 1,318 1,275 Current assets Inventories 16 13 Trade and other receivables
Slide 16: Capex of $137m
Capex of $137m Half year to 30 June 2011 US$m 70 40 10 10 7 Thistle/Deveron The Dons/Conrie Heather/Broom Exploration & Alma Appraisal 16
Slide 17: Cash Flow
Cash Flow Half year to 30 June 2011 US$m 338 (3) 266 (108) (2) 41 Cash & equivalents Pre-tax cash flow Tax paid Capex Financing & Other Cash & equivalents at 1 January 2011 from operations at 30 June 2011 17
Slide 18: Finance Outlook
Finance Outlook Full Year 2011 • Capex expectations of c.$300m • Unit production and transportation costs in line with expectations given current oil price • Depletion • Dependent upon production mix, but anticipated to be approximately $25/Boe • G&A • In line with expectations, similar to H1’11 • T
Slide 19: Review of Operations
EnQuest PLC Review of Operations Nigel Hares Chief Operating Officer
Slide 20: 2011 First Half Operational Results
2011 First Half Operational Results Operatorship driving delivery of results Net production (Boepd) 25,210 18,708 14,065 9,144 5,612 5,060 5,533 4,504 Thistle/Deveron The Dons Heather/Broom Total H1'10 H1'11 20
Slide 21: Thistle / Deveron Highlights
Thistle / Deveron Highlights Operations • Production up 25% on H1’10 despite lower power availability, hence lower water injection • A56/13 (formerly NWFB-P1) was successfully completed with an electric submersible pump and is producing ahead of prognosis • A55 (formerly SFB-P1) was perforated in an
Slide 22: Thistle / Deveron
Thistle / Deveron Drilling Locations Area6-I1 Area6-P1 A46 NWFB-P2 A56 NFB-I1 DEV-P1 WFB-P2 A53 w/o DEV-P2 EFB-P3 DEV-I1 EFB-P1 A16 w/o EFB-P2 A55 2P Reserves Phase 1 Drilled Undrilled Phase 2 Contingent Resources 22
Slide 23: The Don Fields / Conrie Highlights
The Don Fields / Conrie Highlights Operations • Production up 54% over H1’10 • Driven by the successful wells at S5 & S6 in Don Southwest & W4 on West Don, all drilled in 2010 • Production also up as a result of increased equity of 44.95% in West Don, following Stratic acquisition • Don Southwest Ar
Slide 24: The Don Fields / Conrie
West Don The Don Fields / Conrie Don NE 211/18a-W1 Conrie 211/18a-S7 Don SW 211/18a-W2 211/18a-S6 211/18a-W3&W3z 211/18a-S5 211/18a-W4 211/18a-S1 211/18a-S9 211/18a-S3z 211/18a-S8Z 211/18a-S8 211/18a-S4 211/18a-S2z 211/18a-28 “H well” Key Injector Producer Oil reservoir section Injection reservoir s
Slide 25: Heather / Broom Highlights
Heather / Broom Highlights Operations • Production up 9% over H1’10 • Benefits from the H2’10 installation of a new pipeline from Broom to Heather • Re-start of Broom BR4 has added production • New hydrocyclones successfully installed to improve oil in produced water • Rig reactivation programme san
Slide 26: Heather Infill Drilling
Heather Infill Drilling Nine infill location targets selected for initial 2012-2014 drilling campaign • 20 potential infill targets Else • 9 targets selected for initial programme, Rubrum 4000m with 14 MMboe reserves n vo 3000m De NWH A B2 • $40 million rig upgrade Ruby H Erica 2000m Viking Wanderer
Slide 27: 2011 Drilling & Workover Programme
2011 Drilling & Workover Programme Underpinning targeted 26% increase in production Well drilling start dates, by quarter First Quarter, 2011 Second Quarter, 2011 DSW Area E Exploration (Conrie), DSW S9 - INJ, DSW Area 26 Appraisal, Thistle EFB - P1. DSW S8Z - Prod, Thistle NWFB - P1. Third Quarter,
Slide 28: Exploration
Exploration Ivy Broom / Heather Ivy 28
Slide 29: Exploration
Exploration Non EnQuest operated, Tudor Rose Tudor Rose 29
Slide 30: Alma Field Development
Alma Field Development Environmental Statement Submission 30
Slide 31: Summary
EnQuest PLC Summary Amjad Bseisu Chief Executive
Slide 32: 2011 Half Year Summary
2011 Half Year Summary Performed well, growing momentum • Delivered strong production growth in H1’11, at 25,210 Boepd, up 35% on H1’10 • Good operational performance and excellent results from active six well drilling programme • Asset consolidation and exploration success has already enabled EnQue
Slide 33: Track Record of Sustainable Delivery and Growth
Track Record of Sustainable Delivery and Growth Develop, produce, replace MMboe Full year 2010 First half 2011 11.5* 95.5 15.4 88.5 80.5 (4.6) (7.4) Net 2P reserves Production 2010 Reserve additions Net 2P reserves Production H1'11 Reserve additions Net 2P reserves start of 2010 2010 start of 2011 H
Slide 34: Strong EBITDA Generation
Strong EBITDA Generation US $m’s Up 61% Up 22% 327 203 166 Pro-forma H1'10 Pro-forma H2'10 H1'11 34
Slide 35: Outlook Summary
Outlook Summary • Focused operational programme in H2’11 • Three EnQuest operated wells being drilled, one production well and two exploration wells - incorporating three exploration prospects • In addition, one non-operated exploration well • Reactivation of Heather drilling rig, to commence drilli
Slide 36: Technical Skills, Operational Scale, Financial Strength
Technical Skills Operational Scale Financial Strength
Slide 37: EnQuest Appendix
| EnQuest Appendix
Slide 38: EnQuest Producing Assets
EnQuest Producing Assets Operatorship driving delivery of results As at 30 June 2011 Decommissioning liability % Field (first oil) Operator Working interest BP 1% Thistle/Deveron 99% Existing obligations remain with EnQuest (1978) former owners Heather EnQuest 100% 37.5% (1978) Dyas UK 8% Challenger
Slide 39: Thistle / Deveron Infrastructure
Thistle / Deveron Infrastructure 39
Slide 40: The Don Fields Infrastructure
The Don Fields Infrastructure 40
Slide 41: Heather / Broom Infrastructure
Heather / Broom Infrastructure 41
Slide 42: Forward-looking statements
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 and other trend information. These statements and forecasts involve risk and
Slide 43: Definition of "Pro-forma" in these Materials
Definition of “Pro-forma” in these Materials ‘Pro-forma’ data reflects the results for the first six calendar months of 2010, as if the assets previously owned by Petrofac Limited and Lundin Petroleum AB were owned by EnQuest throughout the period, to allow comparison with the 2011 six months to 30