NORTH Sea-focused Enquest has said tax changes in The Budget will help safeguard the future of the area and make it more attractive to invest in older fields in UK waters.

However, Enquest has cut the valuation of its portfolio of assets in the UK North Sea by around $800 million and plans to slash spending this year in response to the slump in oil prices.

Enquest, one of the biggest firms operating in the North Sea after majors like BP, also said it has cut jobs and the rates paid to contractors in the latest sign of the toll the downturn is taking on the industry. It did not give details.

It is thought the company has shed around 20 jobs from its North Sea nerve centre in Aberdeen over the past year, leaving around 180 in post. The company has hundreds of contractors working for it.

Enquest welcomed the changes announced by George Osborne in The Budget on Wednesday following the 50 per cent fall in the price of Brent crude since June. The reforms included a cut in the rate of Petroleum Revenue Tax paid on older fields, to 35 per cent from 50 per cent.

Enquest's chief executive Amjad Bseisu said: "Whilst we are yet to see the details the Budget was very encouraging, particularly for the reduction in PRT ... Combined with the industry's ongoing action to reduce costs and improve efficiency, these measures will help safeguard the future of the North Sea."

Enquest has interests in a range of older fields. The firm has bought into some fields that bigger fish may not want to invest in the expectation it could boost production from them.

Mr Bseisu said the PRT change will increase the value of some of Enquest's late-life assets and encourage the firm to invest in them. He highlighted the Thistle and Alba fields.

The Budget followed intense lobbying by industry figures who said the fall in oil prices could results in firms shutting down many older fields, which cost more to run than new developments.

Oil and gas consultancy Wood Mackenzie said 50 of the 328 onstream fields in the United Kingdom Continental Shelf pay PRT.

The Budget also included a cut in the Supplementary Charge payable on profits from North Sea fields, to 20 per cent from 30 per cent.

Yesterday Alpha Petroleum said the Budget changes will support its private equity owner's commitment to long term UK North Sea investments.

The London-based firm highlighted its appetite for acquisitions in the North Sea, where the company hopes to bring some existing discoveries onstream.

But Enquest provided evidence of the challenges posed by the fall in oil prices since June in its annual results announcement.

The company increased production by 15 per cent in 2014.

However, earnings before interest, tax, depreciation and amortisation fell by seven per cent to $581m in 2014, from $621m in 2013.

Enquest said it acted quickly during the latter part of 2014 to counter the effect of falling oil prices.

This involved cutting the 2015 capital expenditure budget by around 40 per cent to $600m.

Mr Bseisu said: "Despite the uncertain markets we are well placed for the future."

He said Enquest is set to benefit from material increases in production and cash flow in the next two years reflecting the expected start of production from the Alma/Galia and Kraken developments.

Enquest is developing the giant Kraken heavy oil field off Shetland with Edinburgh-based Cairn Energy.

The Alma/Galia project involves revamping the Argyll field, the first producing field in the UK. The profitability of the development appears to have been affected by the fall in oil prices.

Enquest said:

"Tangible oil and gas assets have been impaired by $678.8 million relating to the Don fields and Alma/Galia. The impairment is primarily due to the significant fall in the oil price in the latter part of 2014."

The company recorded $152m further exceptional costs which mostly relate to UK licences. It said: "In current market conditions some of these interests do not merit sufficient funds to progress them to economic development."

Enquest produced an averaged 27,895 barrels oil equivalent daily in 2014.

The company said it is on course to produce around 50,000 boed in the North sea, including output from planned developments.