EnQuest to increase Investment in North Sea Oil Fields
Posted on: 24/03/2015

North Sea Oil and Gas Operator Enquest, have said that as a direct result of the recent tax cuts they will be able to increase their investment in the UK's oil and gas fields.

UK Chancellor of the Exchequer George Osborne announced at the budget on Wednesday that tax cuts had been included in order to relieve some of the stress being experienced by North-Sea focused companies on account of the current low oil prices and rising costs.

In the budget statement Osborne said that the tax on Petroleum Revenue would be reduced by 25% to 35% in a bid to support the production ongoing in the North Sea. The existing supplementary charge for oil firms was also reduced by 10%, with an allowed backdate until January.

EnQuest specialise in operating in aging fields that are often overlooked by larger companies, and they will definitely benefit from the tax cuts.

EnQuest CEO said that the tax cuts “will give more value for some of our late-life assets and give us the ability to invest in those, particularly Thistle and Alba.”

The company revealed that they booked £226m in impairment charges in 2014 amid the falling oil prices, reporting a slight fall in full-year pre-tax profit of $363 million.

EnQuest also revealed the actions they were forced to take in response to the falling oil prices, these including a 20% cut in headcount and pay reductions. They have hedged 10 million barrels of their 2016 production at an estimated price of $68 per barrel, and by looking to increase output by more than 5,000 boepd, they hope to return to normal operations soon.

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