North Seas Largest Petroleum Exploration and Production Company Suffers Losses amid Declining Oil Prices


Published Date : Aug 20, 2015

EnQuest plc the largest independent UK-based petroleum exploration and production company in the North Sea has announced that it suffered massive losses in the first half of the year. This is the latest sign of heavy decline in crude oil prices is having on the global energy industry. 

 

The company has reported pre-tax losses of US$34.6 million for the duration of six months till June 30 of this year after impairments and other exceptional costs. This is a stark reduction as compared to the profits seen by the company of nearly US$78.6 million over the same period of the last year. 

 

The company also observed revenue losses by 12 per cent to US$444 million, largely owing to the declining oil prices, although it said that the hedging programme launched by the company allowed it to offset some part of the losses. The company has also decided to cut capital expenditure plans. 

 

Amjad Bseisu, the chief executive of EnQuest, has said that although the company suffered losses in this

year, it has responded quite well to the current environment of depressing oil prices. He added that the company will be able to reduce the costs incurred per barrel even more in 2016.

 

The company is expecting to reduce the average operating costs incurred by it for the production of every barrel of oil by at least 10 per cent further this year to US$38. The company has said that it is anticipating that the costs of oil produced by it will be in the lower range of US$30 per barrel in the next year.  

 

In the duration of the past 12 months, the prices of Brent crude have observed reduction of more than 52 per cent and have been continuously below US$49 per barrel.