ENQUEST, the oil and gas independent, has lifted production beyond 30,000 barrels per day for the first time following a strong performance by assets in the North Sea and Malaysia.

North Sea-focused EnQuest reached the milestone as production averaged 30,768 barrels of oil equivalent per day (boepd) by 20.2 per cent in the four months to the end of April.

It puts the company on course to hit its full-year production guidance of between 33,000 and 36,000 boepd, representing a 24 per cent annual increase at the mid-point of the range.

The operational update came as EnQuest highlighted encouraging progress on its two major development projects in the North Sea, and said it was on course to deliver cost reduction targets in light of the lower oil price.

Its £4 billion Kraken development, located 125km east of Shetland, is proceeding on budget, with first oil expected in 2017. As many as 20,000 UK jobs are expected to be supported by the development, which will employ an average of 1000 each year during the course of its 25-year life.

EnQuest directly employs about 400 staff in Aberdeen and 200 offshore in the North Sea, as well as about 1000 offshore contractors.

The Alma/Galia project, which is revitalising the North Sea's first producing field, Argyll, remains on track for first oil in 2015, the company said.

The floating production, storage and offloading (FPSO) vessel has been secured in the central North Sea field, with preparation work for pulling in risers underway.

While attention has focused on cutting costs in the North Sea further to the drop in oil price, EnQuest highlighted Kraken and Alma/Galia as two major developments which are expected to deliver big increases in production over the next two years, and material improvements in cash flow.

Noting that Kraken was one of the biggest development in the North Sea, a spokesman said the project is "one that really moves the dial" for the business.

EnQuest is understood to be targeting output of 50,000 boepd from its UK operations alone in the long term.

Chief executive Amjad Bseisu said: "Production of 30,768 boepd to the end of April is a good start to the year and was achieved as a result of strong operational performance across EnQuest's assets and the inclusion of Malaysia, in line with our expectations.

"The strong performance in our newly-acquired Malaysia assets, where we took over operations last year, is testament to our ability to quickly impact production in late life assets."

Meanwhile, EnQuest is continuing to reduce costs and rationalise its capital expenditure following the collapse in oil prices.

The company, which announced in March that it has cut the value of its North Sea assets by around $800m, has slashed capital expenditure to $600 this year, having initially scheduled to spend $1bn.

The reduction in capital expenditure will focus on more marginal projects, with spending on major developments unaffected.

EnQuest has put an oil price hedging programme in place for this year and next which lessens its exposure to any volatility in the price of oil.

It has also renegotiated covenants on its bank debt for the next two years and on its retail bond, to provide further "headroom".

Mr Bseisu added: "Across the business, we continue to implement our programme of cost reduction, improved efficiency and capital expenditure rationalisation.

"The extensive 2015/16 oil price hedging programme remains in place and we have taken a further precautionary measure in resetting the covenants on the retail bond.

"EnQuest is positioned to achieve substantial increases in production from both Alma/Galia and Kraken over the next two year, delivering material increases in cash flow."

The share price closed down 0.75p at 55.75p, ahead of its 22.5p low in January but well below the near 150p it reached in March last year prior to the oil price crash.