EnQuest bosses said yesterday its acquisition of 75% of the Magnus field, giving it 100%, would deliver a huge “step change” for the oil firm.
Chief executive Amjad Bseisu described the £230 million deal with BP as his “cup of tea”, saying it would add 60m barrels of oil to EnQuest’s reserves.
The deal also increases EnQuest’s interests in the Sullom Voe Terminal (SVT) in Shetland, and two pipeline systems.
But EnQuest’s stock fell more than 10% in the City after the company said it would help fund the deal by issuing more than 500m new shares, raising about £106m.
Mr Bseisu said the rights issue was “normal practice”, while chief financial officer Jonathan Swinney stressed the acquisition would add £385m of value to the group.
EnQuest acquired 25% of Magnus and a stake in SVT as part of a deal announced in January 2017. The transaction completed last December, making EnQuest operator of both assets.
Yesterday, Mr Bseisu said Magnus – located north-east of Shetland – presented “compelling” opportunities.
The company has completed two infill wells on the field this year, but hopes to get more out of the asset. It is planning more infill wells.
EnQuest also reported first-half results showing a rise in revenue to £425m, from £265m a year earlier, as production rose by 45.9% to 53,990 barrels of oil equivalent per day.
Pre-tax profits totalled £14.7m, compared with a deficit of £16.5m last year.
EnQuest said the production increase reflected the impact of the Magnus and Kraken fields. Kraken, east of Shetland, produced first oil in June 2017.