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EnQuest using tax break to boost its business

NORTH-sea focused EnQuest said it is making good progress and is preparing to cash in on the latest tax break introduced to stimulate activity in the mature province.

The company, which calls itself the largest UK independent producer in the UK North Sea, said it is preparing to apply for the Brown Field Allowance in connection with work to extend the life of the Thistle field.

Coming eight weeks after the new allowance was unveiled, EnQuest's announcement provides further evidence of the industry's enthusiasm for the tax relief.

This is designed to encourage investment to maximise production from existing assets.

In an interim management statement, EnQuest reiterated that it expects to restart production from the first oil field to come onstream off the UK next year. Called Alma, the field was named Argyll when it started producing in 1975. EnQuest expects to produce first oil from the Alma/Galia development in the fourth quarter of 2013.

Directors expect to submit a field development plan for the giant Kraken heavy oil field east of Shetland to the authorities in the first half next year.

EnQuest said Cairn Energy has been fully integrated into the partnership which will develop the field following its purchase of Nautical Petroleum.

The company told investors it expects production from its existing North Sea assets this year to average around the middle of previous full-year guidance of between 20,000 barrels oil equivalent per day (Boepd) to 24,000 Boepd.

EnQuest was offered 11 licences in the 27th UK licensing round.

The company has made the first moves in its attempt to apply the mature basin strategy developed in the UK overseas.

EnQuest has applied to pre-qualify as an operator in the Norwegian North.

It has agreed to acquire a Malaysian company with interests in blocks in that country, Nio Petroleum (Sabah) Ltd.

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