(Reuters) - EnQuest Plc (ENQ.L) expects higher production in 2018, helped by its flagship Kraken oilfield and its acquisition of a 25 percent stake in BP’s (BP.L) Magnus oil field, the North Sea-focused oil producer said on Monday.
The London-listed company’s shares rose as much as 9.1 percent in early trade.
The positive comments on Kraken came after EnQuest struggled with operational issues and delays at the oilfield, which dragged its shares down in the second half of 2017.
Gross production from Kraken averaged 35,000 barrels of oil per day (bopd) in January and delivered the targeted 50,000 bopd, EnQuest said.
Total average production is expected to grow by between 33 percent and 55 percent to about 50,000-58,000 barrels of oil equivalent per day (boepd) this year, EnQuest said. Production averaged 37,405 boepd in 2017.
The company estimates total unit operating expenditure to fall about 6 percent to $24 per boe in 2018 and cash capital expenditure to be about 32 percent lower at about $250 million.
EnQuest expects to begin reducing its debt of about $2 billion, helped by the higher operating cash flow and lower capital expenditure.
Spending on Kraken was also further reduced by about $100 million and the project’s cost is now expected to be about $2.3 billion, 25 percent lower than its original budget in 2013.
Reuters reported in January that EnQuest hired investment bank Jefferies to advise on a sale of a 20 percent stake in Kraken.
Reporting by Arathy S Nair in Bengaluru; Editing by Gopakumar Warrier