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2017-01-24

EnQuest PLC: Trading and Operations Update

ENQUEST PLC, 24 January 2017
Trading and Operations Update

Key 2016 highlights

· Production averaged 39,751 Boepd in 2016, up 8.7% on 2015, with
production in the UK North Sea up 11.3%

o This was EnQuest's highest annual production since the company started in 2010. Final production was adversely affected by the shutdown period at the end of the year, where the maintenance shutdown of the Brent Pipeline System took over a week longer than was anticipated, with winter weather also hampering the work necessary to bring production fully back onstream.

· Final reported 2016 unit opex is expected to be around the lower end of latest full year guidance range of $25/bbl to $27/bbl.
· Reported 2016 cash capex is also expected to be around the lower
end of the range, of $620 million to $670 million.

· Net debt as at 31 December 2016 expected to be approximately $1.8
billion

Outlook Highlights

· The Kraken FPSO has arrived in the North Sea on schedule and is
continuing under budget and on track for delivery of first oil in Q2
2017

· EnQuest's production in 2017 is expected to average in the range
of 45,000 Boepd to 51,000 Boepd for the full year and will be
dependent on the timing of Kraken first oil

· EnQuest is on course to further reduce average unit opex, in 2017
in the range of $21/bbl to 25/bbl including Kraken production.
EnQuest continues to seek cost reductions across the supply chain

· Cash capital expenditure will reduce in 2017 and is expected to be
in the range $375 million to $425 million, the majority of which is
being invested in the Kraken development

· Hedging of 6 million barrels is in place for 2017, at an average
of c.$51/bbl

· EnQuest is also pleased to announce an agreement to acquire from
BP an initial 25% interest in the Magnus oil field as well as a 3.0%
interest in the Sullom Voe oil terminal and supply facility, 9.0% of
the Northern Leg Gas Pipeline and 3.8% of the Ninian Pipeline System.
See separate announcement for details

Note: The 2017 guidance in this announcement excludes the impact of
the proposed acquisition announced separately today.

EnQuest CEO Amjad Bseisu said:

"EnQuest is delivering reductions in operating and capital expenditure
and we continue to streamline our operations. Our low cost operating
structure and our low cost approach to operatorship are integral
parts of our way of doing business - whilst always retaining safe
operations as our number one priority.

The average production of 39,751 Boepd in 2016 included good
performance at Heather/Broom and at PM8/Seligi with a promising start
after first oil from Scolty/Crathes. Delayed and extended third party
shutdowns reduced production at the end of the year, and productivity
from Alma/Galia has been negatively impacted by well performance
including ESP reliability. Discussions with the ESP supplier on
rectification plans are ongoing. The Kraken development remains under
budget and on schedule for first oil in Q2 2017."

Production statistics

Production on a Net daily Net daily average1 Jan' 2015 to
working interest average1 Jan' 31 Dec' 2015
basis 2016 to
31 Dec' 2016
(Boepd) (Boepd)
Thistle/Deveron 7,533 8,930
Dons/Ythan 5,404 7,690
Heather/Broom 5,948 4,643
Kittiwake 2,988 3,981
Scolty/Crathes 7191 -
Alma/Galia 6,740 1,0832
Alba 1,271 1,178
Total UKCS 30,603 27,505
PM8/Seligi 7,960 8,689
Tanjong Baram 1,188 3733
Total Malaysia 9,148 9,062
Total EnQuest 39,751 36,567

1 Net production since first oil on 21 November 2016, averaged over
the twelve months to the end of Dec' 2016; equates to an average of
6,422 Boepd from first oil to the end of 2016.

2 Net production since first oil on 27 October 2015, averaged over the
twelve months to the end of Dec' 2015

3 Net production since first production in June 2015, averaged over
the twelve months to end of Dec' 2015

Note: In 2016, production from Malaysia averaged 6,524 Boepd on an
equivalent entitlement basis.

UK North Sea

Thistle/Deveron

Across 2016, average production from Thistle/Deveron was 7,533 Boepd.

2016 reflected the benefit of the 2015 drilling programme; the planned
Southern Fault Block P2 sidetrack was however halted at the start of
the year due to slot recovery issues. In Q1 2016, one of the Thistle
power generation turbines was overhauled and other maintenance and
integrity projects continued throughout the year. Further production
enhancing field life extension work was scheduled for the middle of
2016, during a Thistle production shutdown planned to coincide with a
third party shutdown of the Brent Pipeline System ('BPS'). However
the BPS shutdown was delayed to the end of the year, thereby delaying
Thistle production enhancements. The BPS shutdown itself proved to be
considerably longer than expected resulting directly in four weeks of
lost production. Bad weather in late December then also affected
production start up by a further week. In December, Thistle started
and successfully commissioned new process plant and associated
controls. Water injection remained offline during this period to
support essential electrical maintenance and to address flexible
flowline integrity.

The Don fields

Across 2016, average production from the Don fields was 5,404 Boepd.

2016 reservoir performance for the Don wells was above expectations,
particularly with the benefit of the Ythan production well, drilled
last year. However the delay and extension of the third party BPS
shutdown also affected the Don fields, with planned Dons production
enhancement projects considerably delayed and with an extended 32 day
Dons shutdown at the end of H2 2016. The 2016 Dons work programme
included chemical treatment programmes and routine maintenance
throughout the year. The start of gas import benefitted production
in the first half of the year, increasing plant efficiency and
reducing production costs. A water injection line failure on Don
South West reduced production with a temporary repair being
successfully completed in November.

Heather/Broom

Across 2016, average production from Heather/Broom was 5,948 Boepd.

The strong production performance resulted from a combination of work
to increase water injection reliability and increased injectivity
from the wells drilled and worked over in 2015. The Heather Alpha
platform also had outstanding reliability with no unplanned outages.
Maintenance and integrity projects continued as normal.

Greater Kittiwake Area

Across 2016, average production from GKA was 2,988 Boepd.

Production at the start of the year benefitted from continuing
improvements in production efficiency, strong performance of the
Gadwall well and from chemical treatments on Goosander conducted in
2015. The work programme at the start of the year focused on
operational upgrades and on offshore construction on the Kittiwake
platform in readiness for the tie-back of the Scolty/Crathes fields.
H2 2016 included the planned three week shutdown, which included
preparation for Scolty/Crathes delivering production on 21 November.
GKA encountered gas compressor issues which resulted in Grouse being
shut in for part of H2 2016, before being brought back online after
the compressor was reinstated. In Q2 2016, EnQuest undertook the
drilling of the nearby Eagle exploration well, which was confirmed as
a discovery. Ongoing evaluation is continuing.

Alma/Galia

Across 2016, average production from Alma/Galia was 6,740 Boepd,
following delivery of first oil on 27 October 2015.

By Q2 2016, six production wells were onstream. After analysis of the
initial results, a production performance enhancing work programme
was established. The K2 (AP5) well cleaned up naturally after a
number of weeks of production resulting in significantly better
performance. K1 (AP4) required a chemical treatment which was
successful and the workover of the K3Z (AP1) well further increased
production. Well K6 was not completed and was replaced by well K7
(AP6) which came onstream late in Q4. K7 (AP6) overall productivity
has been broadly as anticipated.

Productivity from Alma/Galia has been negatively impacted by well
performance including ESP reliability. Discussions with the ESP
supplier on rectification plans are ongoing. In October 2016, the
EnQuest Producer was brought onto permanent power with the boiler and
steam turbines online.

Malaysian operations
PM8/Seligi

Across 2016, average production from PM8/Seligi was 7,960 Boepd.

Overall 2016 performance was strong. Average annual production volumes
were reduced by 21 days of shutdowns, compared to a single shutdown
of 3.5 days in 2015.

A total of seventeen idle well strings were re-activated during 2016,
adding an additional 5 kBoepd gross production. This included two
add-perforation jobs in November which added over 1,000 bpd gross
production. As a result of the successful idle well activation
programme - and improvements to plant stability at Seligi-A platform,
the field achieved very strong levels of production.

Tanjong Baram

Across 2016, average production from Tanjong Baram was 1,188 Boepd.

Tanjong Baram operational efficiency and uptime remained high
throughout the year.

Presentation to analysts and investors

EnQuest will host a slide presentation and conference call for
investors and analysts starting today at 9:00 AM London time,
focusing mainly on the acquisition which is being announced today and
also covering this Operations Update. The presentation will be
accessible via a live audio webcast, available from the investor
relations pages of the EnQuest website at
http://www.enquest.com/investors.aspx - go to the 2017 tab of the
presentations section and select the 'audio' icon, this is a listen
only facility. If investors or analysts wish to participate in
questions and answers they should dial in to the conference call
facility (details below); using the link above, the slides can be
accessed directly - select 'presentation'. Note that in both cases,
participants should move the slides on manually during the
presentation.

The conference call facility will be available on the following
numbers:

Confirmation Code: EnQuest

London, United Kingdom: ...

Författare WKR

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