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Enquest: operational update

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Oilfield Technology,

Enquest has provided an update on its operations, including production at Kraken.

  • Kraken production rate on plan.
  • Kraken is achieving month on month increases in production and by early November average production rates were around 23 000 bpd gross. The second production processing train was brought onstream later in November, with rates of over 40 000 bpd gross being achieved.
  • The second and third cargo offloads were completed in October and November respectively. The quality of the crude has been well received by buyers; the latest sale of a cargo was contracted at a discount to Brent of less than US$5/bbl, this level of pricing has been achieved earlier than targeted.
  • The final DC2 production well has been brought online. Excellent drilling performance has continued with the drilling of the DC3 wells nearing completion and ahead of time. The process of bringing the DC3 wells onstream has commenced early and plans to drill DC4 in 2018 are being developed.
  • On the basis of this strong performance and subject to continued progress on plant uptime, EnQuest continues to expect production at Kraken to reach 50 000 bpd gross during H1 2018.
  • Group production averaged 35 410 boe/d in the ten months to end October 2017, reflecting Q3 scheduled maintenance shutdowns of around two to four weeks at most of the existing producing assets and one additional unscheduled two week shutdown at Thistle. The fields also experienced natural declines where there has been no recent drilling. EnQuest confirms 2017 full year average production guidance range remains unchanged.
  • EnQuest has continued its close dialogue with its lending banks and as part of EnQuest’s ongoing liquidity management strategy, it has proactively sought and has agreed relaxation of covenants and the amortisation schedule of its Term Loan and Revolving Credit Facility.
  • Available bank facilities and cash amounted to US$179 million as at 31 October 2017, compared to US$213 million as at the end of June 2017. Net debt at 31 October 2017, was US$1991 million compared to US$1922 million as at the end of June 2017. This is prior to receipt of the additional liquidity of over US$100 million announced on 26 October 2017. Hedging of c.4 million bbbls in place for H1 2018, at an average of c.US$59/bbl.
  • The Magnus/Sullom Voe Terminal acquisition remains on course for completion before the end of 2017.

EnQuest CEO Amjad Bseisu said:

“We are making good progress in delivering the ramp up of Kraken, with average Kraken production increasing each month. We have now achieved production rates of over 40 000 bpd gross with DC3 wells online earlier than planned. We are on track to deliver a Kraken production rate of 50 000 bpd gross during H1 2018.

We had a significant planned maintenance programme in Q3 2017, which reduced production in the ten months to the end of October by c.1800 bpd. Overall, our non-Kraken assets are now delivering as per our plan post this programme.

We have hedged c.4 million bbls at c.US$59\bbl for H1 2018 and with our large capital programmes behind us, are on plan to reduce our debt in 2018.”

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