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EnQuest PLC on Friday said it expects to report that operating expenditure increased faster than output during 2022.
EnQuest shares fell 9.6% to 19.30 pence each in London on Friday morning.
The oil and gas producer with operations in the UK and Malaysia said average production in 2022 was 47,259 barrels of oil equivalent per day, up 6.4% from 44,415 in 2021.
However, citing high inflation, Enquest expects to report operating expenditure of around $400 million, increased by 25% from $321.0 million in 2021. Unit operating expenditure of around $23 per barrel of oil equivalent for 2022 would be 12% higher than $20.5 in 2021, and 51% higher than $15.2 in 2020.
The company slashed its net debt as at December 31 to around $717 million from $1.22 billion a year prior. Cash and available debt facilities grew 9.5% to around $349 million from $318.7 million.
Chief Executive Amjad Bseisu said: ‘Looking ahead, changes to the UK Energy Profits Levy will impact cash flow generation and have implications for our capital allocation strategy and our UK production growth ambitions. However, given the strong performance towards our leverage target, returns to shareholders are becoming an increasingly important consideration for our capital allocation decisions.
‘In the immediate future, we remain focused on deleveraging and intend to prioritise organic investments with quick pay backs and accretive merger & acquisition opportunities that allow us to leverage our operating capability and tax loss position.’
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