Results for the year ended 31 December 2018 and 2019 outlook 

48% production growth and debt reduction delivered in 2018 

2019 production growth and debt reduction driven by Magnus 

 21 March 2019 

Unless otherwise stated, all figures are on a Business performance basis and are in US Dollars. 

• Acquisition of additional interests in Magnus and the Sullom Voe Oil Terminal completed in December 
• Group production averaged 55,447 Boepd in 2018, up 48.2% on 2017 
• Revenue of $1,201.0 million (2017: $635.2 million) and EBITDA of $716.3 million (2017: $303.6 million); higher volumes and realised prices, partially offset by the impact of commodity hedges 
• Cash generated from operations of $788.6 million (2017: $327.0 million) reflecting higher EBITDA 
• Cash capital expenditure of $220.2 million (2017: $367.6 million) 
• Cash and available bank facilities amounted to $309.0 million at 31 December 2018, with net debt of $1,774.5 million (2017: $1,991.4 million) 
• Net 2P reserves of 245 MMboe and net 2C resources of 198 MMboe at the end of 2018 (2017: 2P reserves of 210 MMboe; 2C resources of 164 MMboe); growth driven by acquisition of Magnus 

• Average Group production expected to grow by around 20% to between 63,000 to 70,000 Boepd; production has averaged 67,700 Boepd in the first two months of the year 
• Operating expenditure expected to be approximately $600 million, including additional interest in Magnus 
• Cash capital expenditures expected to be approximately $275 million; includes a combined total of approximately $100 million related to deferred payments from prior periods and phasing of spend from 2018, mainly DC4 
• EnQuest has hedges in place for c.8.0 MMbbls of oil. Approximately 6.5 MMbbls are hedged at an average floor price of c.$66/bbl. In accordance with the Oz Management facility agreement, the Group has a further c.1.5 MMbbls hedged across 2019 with an average floor price of c.$56/bbl 
• Group's credit facility reduced to $730.0 million following early repayment of $55.0 million 
• End 2019 Net debt to EBITDA ratio expected to be approaching 2x; EnQuest's target is between 1x and 2x 

EnQuest Chief Executive, Amjad Bseisu, said: 

"In 2018, the Group met its financial and operational targets. Production increased by 48%, just above the midpoint of our guidance, which, along with strong cost control, drove a significant improvement in cash generation allowing the Group to reduce net debt. 

"FPSO performance has been the main limiting factor in achieving Kraken's full production potential. As such, our clear operational priority is to improve Kraken's FPSO uptime and efficiency. We are working with the FPSO operator on a number of improvement initiatives. 

"We are committed to further reducing our debt, and expect our net debt to EBITDA ratio to trend towards 2x this year and intend to operate within our 1-2x target in the future. 

"The acquisition of Magnus has added material value to the business through significant production and reserve growth, and the application of our production enhancing capabilities are already improving performance above original expectations. 

"In the near term, we remain focused on investing in short-cycle projects which maximise cash flow and allow us to deliver on our plans to reduce our debt. We have opportunities for low-cost material growth in near-field, short-cycle infill and tie-back investments, particularly at Magnus, PM8/Seligi and Kraken. 

"Longer term, our capital allocation will balance investment to develop our asset base, returns to shareholders and the acquisition of suitable growth opportunities." 

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