EnQuest PLC

Results for the six months ended 30 June 2021

2 September 2021

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

Comparative figures for the income statement relate to the period ended 30 June 2020 and the Balance Sheet as at 31 December 2020. Alternative performance measures are reconciled within the 'Glossary - Non-GAAP measures' at the end of the Financial Statements.

EnQuest Chief Executive, Amjad Bseisu, said:

"The Group delivered strong free cash flow in the first half which reduced net debt. Performance at Kraken has been good with the FPSO performing well, while production at PM8/Seligi has been better than expected as a result of the acceleration of initial restoration activities following the riser detachment. Production at Magnus has been impacted by topside related well performance but our production enhancement programme has partially recovered the well potential and we expect further recovery over the remainder of the year. We remain focused on improving production across our existing portfolio.

"The Golden Eagle acquisition remains on track to complete around the end of September and will add production, reserves and cash flow to the Group, while the Bressay and Bentley acquisitions, offer further long-term potential development opportunities."

• Group net production averaged 46,187 Boepd (2020: 66,055 Boepd)

• Kraken production of 23,690 Boepd (33,603 Boepd gross) was in line with the Group's guidance reflecting strong production and water injection efficiency and a good performance from the Floating Production, Storage and Offloading vessel ('FPSO')

• Improved production at PM8/Seligi as a result of the acceleration of initial production recovery activities following the riser detachment in late 2020

• Lower production at Magnus reflected the slower execution and an increase in scope of the well intervention programme, an unplanned third-party outage, power related failures and natural declines

• Revenue and other operating income of $518.3 million (2020: $450.0 million) and EBITDA of $345.4 million (2020: $320.8 million) reflects materially higher oil prices, partially offset by lower production

• Operating costs decreased to $153.0 million (2020: $174.3 million) primarily reflecting lower tariff expenditure

• Cash generated from operations of $287.9 million (2020: $282.6 million); cash expenditures of $54.6 million (2020: $108.5 million)

• Strong free cash flow generation of $141.5 million (2020: $86.8 million) reflecting materially lower cash expenditures

•       At 30 June 2021, net debt reduced to $1,183.2 million (end 2020: $1,279.7 million) reflecting strong free cash flow generation. Total cash and available facilities were $303.4 million (end 2020: $284.1 million)

•        Signed a new senior secured borrowing base debt facility (the 'RBL') of $600 million with an additional amount of $150 million for letters of credit for up to seven years

•        Agreed to acquire Suncor Energy UK Limited's 26.69% non-operated interest in the producing Golden Eagle area for an initial consideration of $325.0 million with completion expected around the end of September

•        Signed a Share Purchase agreement ('SPA') with Whalsay Energy Holdings Limited to purchase its 100.0% equity interest in the P1078 licence containing the proven Bentley heavy-oil discovery. Bentley offers long-term potential development opportunities and other synergies, with the transaction completed in July

•       2021 average net Group production is expected to be at the lower end of the guidance range of 46,000 Boepd and 52,000 Boepd. This reflects expected performances at Magnus, the Greater Kittiwake Area and PM8/Seligi over the course of the second half of the year. Kraken gross production is expected to be between 30,000 Boepd and 35,000 Boepd (21,150 Boepd to 24,675 Boepd net)

•       Operating costs are expected to be approximately $300 million, reflecting lower lease charter credits driven by higher uptime at Kraken, additional production enhancement scopes and topside maintenance activities at Magnus, higher diesel costs and sterling strength

•       Combined cash capital and abandonment expenditure, excluding costs associated with the PM8/Seligi riser repair, is expected to be broadly around $120 million

•       EnQuest has hedged a total of c.11 MMbbls for full year 2021 predominantly using costless collars, with an average floor price of c.$59/bbl and an average ceiling price of c.$69/bbl, with c.6 MMbbls hedged with an average floor of c.$62/bbl and ceiling price of c.$73/bbl in the second half of 2021. For 2022, EnQuest has hedged a total of c.6 MMbbls using similar structures, with an average floor price of c.$61/bbl and an average ceiling price of c.$75/bbl. For 2023, the Group has hedged a total of approximately c.1 MMbbls with an average floor price of c.$55/bbl and an average ceiling price of c.$73/bbl

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