March 20, 2018 / 7:56 AM / a year ago

UPDATE 1-EnQuest's 2017 core profit falls but beats expectations

(Adds details on Kraken output, shutdowns, hedging)

LONDON, March 20 (Reuters) - EnQuest reported a 36.4 percent fall in annual core profit of $303.6 million on Tuesday, slightly beating analysts’ forecasts, as the North Sea-focused oil group embarks on reducing debt of around $2 billion helped by the ramp-up of its Kraken field.

EnQuest said it expected to raise production to 50,000 to 58,000 barrels of oil equivalent per day (boe/d) this year from just under 38,000 boe/d last year. Kraken’s output averaged 38,000 boe/d in January and February.

Kraken was shut down due to cold weather earlier this month, which means a planned shutdown for April will no longer take place. A planned shutdown for the third quarter will go ahead.

EnQuest has hired investment bank Jefferies to advise on a sale of a 20 percent stake in Kraken, according to a document seen by Reuters in January.

Its earnings before interest, tax, depreciation and amortisation topped the $296.26 million expected by analysts, according to the Reuters smart estimate.

But that was down from $477.1 million in 2016.

Revenue fell 25.2 percent to $635.2 million which the group said was largely due to lower realised prices with its hedging programme. This year, the group hedged 7.5 million barrels of oil at an average price of around $62 per barrel. (Reporting by Shadia Nasralla; editing by Louise Heavens and Jason Neely)

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