North Sea producer EnQuest has insisted it is well positioned to survive on an oil price of as low as $25 a barrel after a new round of costcutting.
Announcing its annual results to 31 December, the company said that it was targeting cost cuts of $190 million in 2020.
Chief executive Amjad Bseisu said: "Given the prevailing low oil price environment, we have taken decisive action to lower our cost base, targeting $190 million of operating cost savings in 2020, equating to unit operating expenses of around $15/boe [barrel of oil equivalent]."
He said that with these cost cuts, cash flow break-even was estimated at $33 boe but that would fall to $25 boe for the rest of the year.
Brent crude dropped as low as $22.76 a barrel at the end of March but has rallied to more than $30 on hopes of an end to the Saudi-Russia price war.
Bseisu added: “2021 cash flow break-even is now forecast at c.$27/boe, with unit operating expense of around $12/boe. With these significant reductions, we are well positioned to manage through a sustained low oil price environment.
“Our three largest assets continue to generate meaningful operating cash flows, even at low oil prices, and, in the medium to long-term, offer low-cost resource maturation opportunities which are aligned with our proven differential capabilities.
EnQuest, which has a major office in Aberdeen, said that in the year to date production remained good, with little impact on daily operations from Covid-19.
In 2019 the group had achieved average production of 68,606 boepd in 2019, up 23.7% on 2018. Its revenue rose to $1.71 billion from $1.20 billion with EBITDA of $1.01 billion up from $716.3 million.
Bseisu said: “During 2019, EnQuest again delivered on its targets. The combination of improved Kraken performance, a full year contribution at Magnus and strong performances at Scolty/Crathes and PM8/Seligi, drove significant production growth and free cash flow generation, which facilitated a material reduction in the Group's net debt.”
Net debt was down to $1.41 billion from $1.77 billion previously.
