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FY 2018 Earnings and 2019 Outlook – Enquest

Enquest · Mar 21, 2019 · 38 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. FY 2018 Earnings and 2019 Outlook – Enquest – slide 1
    EnQuest 2018 Full Year Results
  2. FY 2018 Earnings and 2019 Outlook – Enquest – slide 2
    Amjad Bseisu Chief Executive
  3. FY 2018 Earnings and 2019 Outlook – Enquest – slide 3
    Agenda Overview Amjad Bseisu, CEO Operations overview Bob Davenport, Managing Director - North Sea Kraken subsurface Martin Mentiply, Chief Petroleum Engineer Financials Jonathan Swinney, CFO Summary Amjad Bseisu, CEO
  4. FY 2018 Earnings and 2019 Outlook – Enquest – slide 4
    EnQuest A clear strategy with a focused business model Strategic vision To be the operator of choice for maturing and underdeveloped hydrocarbon assets Focused business model A production and development led E&P business Utilises…
  5. FY 2018 Earnings and 2019 Outlook – Enquest – slide 5
    EnQuest priorities Deliver, de-lever, grow Production Deliver Cost control Capital discipline Scheduled bank amortisation De-lever Targeting net debt:EBITDA ratio of 1-2x Develop asset base Grow Consider selective,…
  6. FY 2018 Earnings and 2019 Outlook – Enquest – slide 6
    EnQuest 2018 performance Operational and financial targets met Net production (Boepd) Unit opex (/boe) Cash capex (m) 60,000 55,447 26 26 400 368 50,000 300 24 220 37,405 23 40,000 200 22 30,000 100 20,000 20 0 Deliver…
  7. FY 2018 Earnings and 2019 Outlook – Enquest – slide 7
    EnQuest 2018 performance Debt reduction on track Net debt:EBITDA ratio 7 6.6 6 5 4 3.8 3 3.3 2 2.5 1.7 1 De-lever 0 2014 2015 2016 2017 2018 75% Magnus acquisition brings significant cash generation Gross bank…
  8. FY 2018 Earnings and 2019 Outlook – Enquest – slide 8
    EnQuest 2018 performance Magnus acquisition provides growth and portfolio balance Grow Material increase in production Significant 2P and 2C resource additions Net production (Boepd) Reserves and resources (MMboe) 60,000…
  9. FY 2018 Earnings and 2019 Outlook – Enquest – slide 9
    Operations overview Bob Davenport Managing Director - North Sea
  10. FY 2018 Earnings and 2019 Outlook – Enquest – slide 10
    Production performance Growth of 48%, in line with guidance 2018: 55,447 Boepd1 Production growth: 2017: 37,405 Boepd1 Delivered 21,369 19,293 Full year contribution from Kraken and Magnus 15,627 Drilling at Heather, Magnus…
  11. FY 2018 Earnings and 2019 Outlook – Enquest – slide 11
    2018 operational delivery Successful drilling in Malaysia; ESP replacements at Alma Net production (Boepd) Malaysia Drilled 2 wells at PM8/Seligi; delivered target production volumes PM8/Seligi: idle well restoration and…
  12. FY 2018 Earnings and 2019 Outlook – Enquest – slide 12
    2018 operational delivery cont. Magnus and Kraken drive production growth Net production (Boepd) Northern Maintained high production and injection efficiency North Sea Magnus: drilling, well interventions and plant 19,293…
  13. FY 2018 Earnings and 2019 Outlook – Enquest – slide 13
    Magnus Unlocking production and reserve growth potential Magnus A giant field with c.2.0 billion boe HIIP and significant remaining potential Secured early wins Production increased 20% in first year Plant de-bottlenecking…
  14. FY 2018 Earnings and 2019 Outlook – Enquest – slide 14
    Kraken Improve FPSO performance; realise long-term value Kraken Multiple areas improved since first oil Water injection system including seawater filters Power load management Steam and heating systems Separation stability Fuel…
  15. FY 2018 Earnings and 2019 Outlook – Enquest – slide 15
    Kraken subsurface Martin Mentiply Chief Petroleum Engineer
  16. FY 2018 Earnings and 2019 Outlook – Enquest – slide 16
    Kraken field water cut evolution Field data indicates effective reservoir sweep Voidage recovery through water flood provides Water cut trend the primary approach to maximising reserves 80% of the field volumes are now at voidage…
  17. FY 2018 Earnings and 2019 Outlook – Enquest – slide 17
    Kraken reserves Life of field reserves substantially unchanged Kraken field net oil thickness map Field-wide STOIIP and reservoir properties remain largely unchanged since FDP High-quality seismic Extensive drilling completed…
  18. FY 2018 Earnings and 2019 Outlook – Enquest – slide 18
    Financial review Jonathan Swinney Chief Financial Officer
  19. FY 2018 Earnings and 2019 Outlook – Enquest – slide 19
    Results summary Strong 2018 performance Unless otherwise stated all figures are before exceptional items and depletion of fair value uplift and are in US Dollars Production Revenue1 Unit opex EBITDA2 55,447 Boepd 1,201 million…
  20. FY 2018 Earnings and 2019 Outlook – Enquest – slide 20
    Cash flow Strong cash generation m Net cash flow from operating activities Improved cash generation: 900 Delivered 50 800 50 794 Favourable prices (20) 203 Material increase in volumes 700 Improved asset mix 600 Thistle…
  21. FY 2018 Earnings and 2019 Outlook – Enquest – slide 21
    Capital discipline Materially lower capex requirement post Kraken development m m 300 2018 vs 2017 cash 1,200 Cash capex trend 2018 cash capex: capex 1,058 252 Delivered 1,000 Focused on drilling at Kraken, 250 Magnus, Heather…
  22. FY 2018 Earnings and 2019 Outlook – Enquest – slide 22
    Net debt and cash flow Improved cash generation facilitating debt reduction m Movement in net debt 2,200 Debt reduction: 2,100 Delivered 2,000 1,991 794 Strong cash flow from 1,900 operations 1,800 37 1,774 Offset by 320…
  23. FY 2018 Earnings and 2019 Outlook – Enquest – slide 23
    Deleveraging remains a priority Portfolio cash generation underpinned by hedges De-levering underway m Net debt metrics 1,991 Ratio 2,000 7 End of high capex phase 1,797 1,774 1,800 6 Production volumes increasing 1,600 1,548…
  24. FY 2018 Earnings and 2019 Outlook – Enquest – slide 24
    Debt structure Long-dated, manageable repayment structure m Debt structure1 m 5-year repayment profile1 2,500 2,000 72 72 2,000 179 1,500 179 1,500 965 965 1,000 1,000 32 500 965 500 874 799 25 439 205 155 0…
  25. FY 2018 Earnings and 2019 Outlook – Enquest – slide 25
    Magnus generates strong cash flow 75% interest cash waterfall1 Cash flow waterfall pre repayment of Cash flow waterfall post repayment of EnQuests 100m consideration EnQuest cash consideration 50% 50% 50% 50% Free…
  26. FY 2018 Earnings and 2019 Outlook – Enquest – slide 26
    2019 outlook Prioritising debt reduction Production Cash capex Net debt:EBITDA 63,000-70,000 Boepd 275 million Approaching 2x 20% Operating expense Hedging Oil price sensitivity EBITDA increases 600 million c.8 MMbbl c.150…
  27. FY 2018 Earnings and 2019 Outlook – Enquest – slide 27
    Amjad Bseisu Chief Executive
  28. FY 2018 Earnings and 2019 Outlook – Enquest – slide 28
    2019 outlook Focused on projects that maximise cash flow Operating costs and Near-term opportunities Production capital spend Target: 63,000-70,000 Boepd Evaluation underway On track YTD Feb: 67,700 Boepd Maintain low unit…
  29. FY 2018 Earnings and 2019 Outlook – Enquest – slide 29
    Operational growth beyond 2019 Selected portfolio opportunities Deliver 2P Reserves Late-life asset / Platform Well Plant Sub-sea Infill drilling life extension drilling intervention improvements tie-back Magnus Kraken…
  30. FY 2018 Earnings and 2019 Outlook – Enquest – slide 30
    EnQuest priorities Debt reduction remains the priority Deliver De-lever Grow Production growth Scheduled amortisation Potential for near-field, Cost control Targeting net short-cycle opportunities Capital discipline…
  31. FY 2018 Earnings and 2019 Outlook – Enquest – slide 31
    EnQuest A clear strategy with a focused business model Questions & Answers 30
  32. FY 2018 Earnings and 2019 Outlook – Enquest – slide 32
    Appendices
  33. FY 2018 Earnings and 2019 Outlook – Enquest – slide 33
    Well set for substantial growth Q&A Strong CAGR (c.17.2% to 2019 mid-point) Average net production (Boepd) 70000 63,000 - 70,000* 60000 50000 40000 30000 20000 10000 0 2009 2010 2011 2012 2013 2014 2015 2016 2017…
  34. FY 2018 Earnings and 2019 Outlook – Enquest – slide 34
    Group tax position No material UK cash CT/SCT on operational activities expected UK Tax Allowances m Tax losses at 31 December 2017 3,121.3 2018 net additions plus RFES 42.8 Prior year true up (38.8) Tax losses at 31 December 2018…
  35. FY 2018 Earnings and 2019 Outlook – Enquest – slide 35
    Group tax position Effective tax rate reconciliation ETR % ms Loss Before Tax 94.0 UK CT Rate 40% 37.6 RFES 68% (64.2) UK and overseas tax rate differences 22% 20.3 Permanent items (23%) (21.7) Prior year adjustments…
  36. FY 2018 Earnings and 2019 Outlook – Enquest – slide 36
    Post-tax exceptional items Year to 31 December 2018 49.1 million post-tax gain on exceptionals, primarily made up of: Net uplift associated with the 25% interest step-acquisition of 74.3 million, comprising 123.9 million associated…
  37. FY 2018 Earnings and 2019 Outlook – Enquest – slide 37
    EnQuest: 8 Hubs A strong platform for growth Heather/Broom Kraken Thistle/Deveron The Dons Magnus Alma/Galia Greater Kittiwake Area PM8/Seligi 36
  38. FY 2018 Earnings and 2019 Outlook – Enquest – slide 38
    Strong reserves growth in first nine years Reserve life c. 13 years MMboe Net 2P Reserves 300 263 245 250 200 150 100 81 50 0 (99) -50 Net 2P reserves Production 2010- Reserve additions Net 2P reserves…

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