Enquest Plc · LSE:ENQ
Enquest — H1 2021 Earnings Presentation
25 slides from Enquest's earnings presentation, Sep 2, 2021
Slide 1: EnQuest 2021 Half Year Results
Page EnQuest 2021 Half Year Results
Slide 2: Introduction
02 September 2021 Page 2 Introduction Amjad Bseisu Chief Executive
Slide 3: Strong free cash flow driving debt reduction; Golden Eagle acquisition to add significant value
02 September 2021 Page 3 Strong free cash flow driving debt reduction; Golden Eagle acquisition to add significant value H1 production at 46,187 Boepd1; within guidance Golden Eagle expected to replace production from CoP assets LTIF of zero2 – Heather achieved two years LTI free in July Deliver Str
Slide 4: Lower production but strong capital discipline
02 September 2021 Page 4 Lower production but strong capital discipline Net production1 (Boepd) Production - Good Kraken performance, in line with guidance 60,000 66,055 40,000 - PM8/Seligi performing better than expected 46,187 20,000 - Magnus impacted by well performance 0 - Alma/Galia and the Don
Slide 5: Guidance update
02 September 2021 Page 5 Guidance update Production expected to be at the lower end of the full year guidance range - Kraken expected to produce within original guidance range - Production enhancement activities at Magnus, GKA and PM8/Seligi progressing - Golden Eagle expected to add c.2,000 Boepd2
Slide 6: Environmental, Social and Governance
02 September 2021 Page 6 Environmental, Social and Governance - Good progress made on reducing Scope 1 and 2 emissions Focused on absolute - 2020 emissions were 26% lower than 2018; ahead of UK emissions Government’s North Sea Transition Deal targets reductions - Delivered material reduction in flar
Slide 7: Operations overview
02 September 2021 Page 7 Operations overview Bob Davenport Managing Director – North Sea
Slide 8: Production in line with guidance
02 September 2021 Page 8 Production in line with guidance H1 2021: 46,187 Boepd1 Summary: H1 2020: 66,055 Boepd1 - Kraken production in line with guidance - Better than expected performance at PM8/Seligi - Lower volumes at Magnus 27,472 23,690 18,806 13,847 7,700 8,306 4,809 3,504 3,771 337 Kraken M
Slide 9: Kraken in line with guidance; Magnus production lower than 2020
02 September 2021 Page 9 Kraken in line with guidance; Magnus production lower than 2020 Kraken Magnus - FPSO performing well; production efficiency of 90% and water - Slower execution and an increase in scope of the well intervention injection efficiency of 92% programme - Good subsurface and well
Slide 10: GKA lower than 2020; Dons CoP as planned
02 September 2021 Page 10 GKA lower than 2020; Dons CoP as planned Other UK Upstream Decommissioning Greater Kittiwake Area | Scolty/Crathes | Alba Heather/Broom | Thistle/Deveron | Alma/Galia | The Dons - Reduced production at GKA; - Good progress on decommissioning activities at Heather/Broom: - E
Slide 11: PM8/Seligi riser reinstatement progressing
02 September 2021 Page 11 PM8/Seligi riser reinstatement progressing Malaysia PM8/Seligi | PM409 - Better than expected performance at PM8/Seligi following detached riser in late 2020: - Acceleration of initial production recovery activities - Planned five-day maintenance shutdown in July successful
Slide 12: Financial review
02 September 2021 Page 12 Financial review Jonathan Swinney Chief Financial Officer
Slide 13: H1 2021 financial performance
02 September 2021 Page 13 H1 2021 financial performance Revenue1 Unit opex Cash generated from Free cash flow5 operations c.$518 million c.$19/Boe c.$288 million c.$141 million 15% 34% 2% 63% Cash EBITDA2 Net debt4 expenditures3 c.$345 million c.$55 million c.$1,183 million 8% 50% 8% Unless otherwis
Slide 14: Focused cash expenditure programme
02 September 2021 Page 14 Focused cash expenditure programme Cash capital expenditure: Cash capital and abandonment expenditure $m - Production enhancement and topside maintenance programmes at Magnus 120 108 - Replacement tethers at Kraken 7 - PM8/Seligi riser repair related costs 100 Abandonment e
Slide 15: Strong cash generation of c.$141 million reducing net debt
02 September 2021 Page 15 Strong cash generation of c.$141 million reducing net debt H1 2021 Movement in net debt - Sculptor Capital facility fully repaid $m - Bond interest settled through issue of additional notes (‘PIK’) due to oil price <$65/bbl 1,400 H2 2021 outlook - $360 million drawn down fr
Slide 16: Available facilities
02 September 2021 Page 16 Available facilities1 $m A simplified capital structure 1,800 1,700 - New RBL of $600 million agreed with initial coupon of 4.25% 1,600 - RBL has been used to fully repay existing RCF and the Magnus vendor loan 1,500 57 - Part finance the Golden Eagle acquisition 1,400 600
Slide 17: Summary
02 September 2021 Page 17 Summary Amjad Bseisu Chief Executive
Slide 18: A transformed company, delivering on our strategy
02 September 2021 Page 18 A transformed company, delivering on our strategy Proven track record Simplified capital structure Significant opportunities Deliver De-lever Grow - Production within guidance - Strong free cash flow of c.$141 million - Golden Eagle is a high-quality, low-cost asset expecte
Slide 19: Thank you
©nQuest Thank you
Slide 20: Operator of choice for maturing hydrocarbon assets
02 September 2021 Page 20 Appendix Operator of choice for maturing hydrocarbon assets Production breakdown1 Annual production CAGR of c.14% since IPO 80,000 Malaysia 4.8 kboepd 10% 60,000 40,000 UK 41.3 kboepd 90% 20,000 0 1 Year to date December 2020 2009 2010 2011 2012 2013 2014 2015 2016 2017 201
Slide 21: A clear purpose and strategy with a focused business model
02 September 2021 Page 21 Appendix A clear purpose and strategy with a focused business model Purpose - Providing creative solutions through the energy transition Strategic vision - To be the operator of choice for maturing and underdeveloped hydrocarbon assets Focused business model - A production
Slide 22: No material cash tax expected to be paid on UK operations
Page 22 Tax losses at 31 December 2020 3,183.9 2021 net decrease (10.9) Prior year adjustment 0 Tax losses at 30 June 2021 3,173.0 - No material cash tax expected to be paid on UK operation activities for the foreseeable future - Small cash tax payments are expected in Malaysia on the PM8/Seligi PSC
Slide 23: Profit Before Tax Notional UK Corporation Tax
Page 23 % $m Profit Before Tax 49.1 Notional UK Corporation Tax 40.0% (19.6) 2021 RFES 60.8 UK and overseas tax rate differences (11.9) Permanent items (1.2) Tax losses not recognised (139.5) Other 6.0 2021 Tax (Charge)/Credit 214.7% (105.4)
Slide 24: Restatement of deferred tax asset
Page 24 30 June 2020 31 Dec 2020 Deferred Tax Asset previously reported 322,254 503,946 Additional Tax Losses recognised for period to 30 June 2020 146,570 146,570 Additional Tax Losses recognised for period to 31 December 2020 9,287 Deferred Tax Asset as restated 468,824 659,803 - Restatement arise
Slide 25: Forward-looking statements
02 September 2021 Page 25 eQ 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 st