Enquest plays swapsies in the North Sea

North Sea oil and gas firm Enquest is to increase its stakes in the Kildrummy and Cairngorm discoveries in the North Sea.

EnQuest said it will buy an additional 20% interest in the Kildrummy discovery from Italian oil giant Eni for a deferred contingent $3m cash consideration. That will take its interest in the Kildrummy field up to 60%.

Meanwhile, it is to take total ownership of the Cairngorm asset licence block 16/3d in the UK North Sea; it inherited a 50% stake in the block when it acquired Stratic Energy in 2010.

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Enquest has agreed to buy-out Cairngorm's joint-owner, Sterling Resources, with Sterling taking Enquest's 10% interest in the F Quad assets in the Dutch North Sea in return for handing over full control of Cairngorm to Enquest.

The Cairngorm discovery straddles blocks 16/3d and 16/2b in the UK bit of the North Sea; 100% of block 16/2b is already owned by EnQuest, and following this transaction EnQuest will operate both blocks.

In a production update, the group revealed a significant drop in output thus far in 2012 though this was an outcome foreseen by the management.

Average production between January 1st and April 30th was 20,976 barrels of oil equivalent per day (boepd). That compares to the 25,403 boepd seen over the same period of 2011.

For the full year Enquest has confirmed guidance of between 20,000 boepd and 24 boepd .

The firm is still waiting on approval for its field development plan for the Galia field but said the Alma/Galia development remains on schedule.

"Our production continues to drive our earnings and cash flow, putting us in a good position to take advantage of further business development opportunities as they arise," said Amjad Bseisu, Chief Executive of Enquest.

By 08:57 Enquest shares had fallen 3.2%.

BS