By Scott Wright

ENQUEST has underlined its “long-term commitment to the North Sea” as it declared its largest activity programme since 2014 was “well under way”.

The oil and gas giant, which has stakes in the major Magnus, Kraken and Golden Eagle fields, has planned an “extensive wells programme” at several assets this year.

The company said it remains on track to deliver its 2022 net production target of 44,000 to 51,000 barrels of oil equivalent in 2022, having achieved net production of 50,361 boepd in the four months to the end of April.

The update from EnQuest came as shares in Independent Oil & Gas slumped more than 10 per cent after it reported the enforced shut-down of two fields in the southern North Sea because of technical issues.

IOG has in recent weeks benefitted from surging gas prices after starting production at the Blythe and Elgood fields in March, following the start of the Russian invasion of Ukraine.

But the company, which won backing from US billionaire Warren Buffett in 2019, expressed frustration yesterday that “liquids handling issues” at the Perenco Bacton terminal had enforced a full shut-in of the Blythe and Elgood fields. This has followed the identification of a drainage system deficiency in two recycle compressors in the condensate stabilisation unit at the terminal. The unit processes liquid streams coming into the terminal, including hydrocarbon liquids that flow into the Saturn Banks Reception Facilities from Blythe and Elgood.

EnQuest reported total UK production of 44,451 boepd in the four months to April 30, up from 41,019 boepd in the same period last year. The increase reflected a contribution of 7,551 boepd from the Golden Eagle field, in which the company acquired a near-30 per cent stake from Canada’s Suncor in February 2021. The acquisition was completed on October 22.

However, EnQuest reported falls in production at the giant Magnus and Kraken fields in the first four months of the year. Production from Kraken, the company’s biggest producing asset, dipped to 19,862 boepd from 22,689 boepd in the first four months of last year.

Output at Magnus, where EnQuest holds a 100 per cent interest, dipped to 12,880 boepd, from 14,250 boepd last year, in a period that saw the company continue well restoration activities. Two wells were returned to service, and EnQuest said it was focused on improving production through the continuation of its well intervention programme. Infill drilling of three wells is planned for later this year.

EnQuest said the floating, production, storage and offloading vessel on Kraken “continues to deliver top quartile performance”.

Production from EnQuest’s assets in Malaysia increased to 5,910 boepd from 4,631 boepd during the same period in 2021.

Amjad Bseisu, chief executive of EnQuest, said: “Underlining EnQuest’s long-term commitment to investing in the North Sea, our largest activity programme since 2014 is well under way. At Magnus, we have successfully restored production to two wells, completed a well intervention which has already achieved payback on investment, and are preparing to drill the first of three wells planned for 2022.”

He added: “Overall, our focus remains on continuing to reduce net debt while selectively investing in our low-cost, quick-payback well portfolio and existing infrastructure in order to sustain our production base. At the same time, we continue to be disciplined in our evaluation of organic and inorganic growth opportunities, including development of our new energy business in a capital light manner.”

Meanwhile, IOG chief executive Andrew Hockey highlighted his frustration over the shut-ins at Blythe and Elgood, but hopes production will be restored on the coming weeks.

Mr Hockey said: “Whilst relatively high liquids flows are welcome and generate revenue, liquids handling issues within the Perenco Bacton terminal have unfortunately required a short-term shut-in of Saturn Banks production. This is a very frustrating interruption to our efforts to maintain stable, consistent early gas flows, however, maintaining the highest safety standards must always be the first priority.”

Shares in IOG closed down 10.3% at 23.6p. EnQuest shares were 1.1% down at 34.95p.