Results for the Half Year ended 30 June 2019

Summary production statistics and key financials

 H1 2019H1 2018Change %
Production (Boepd)68,548    53,990        27.0
Revenue and other operating income ($m)1858.2  548.356.5
Realised oil price ($/bbl)166.1    59.511.1
Average unit operating expenditure ($/Boe)20.122.6(11.1)
Gross profit ($m)269.9   100.8167.8
Profit before tax & net finance costs ($m)264.5  105.2151.4
EBITDA ($m)2525.9   311.968.6
Stautory reported profit after tax ($m)44.3   43.32.3
Statutory reported basic earnings per share (cents)32.73.3(18.2)
Cash generated from operations ($m)426.2    318.333.9
Cash capex ($m)    124.6   125.8(1.0)
 End June 2019    End 2018 
Net (debt)/cash ($m)4(1,637.9) (1,774.5)   (7.7)

Notes:
1 Including gains of $7.6 million (2018: losses of $77.3 million) associated with EnQuest’s oil price hedges
2 EBITDA is calculated on a Business performance basis. It is calculated by taking profit/loss from operations before tax and finance income/(costs) and adding back depletion, depreciation, foreign exchange movements, inventory revaluation and the realised gain/loss on foreign currency derivatives related to capital expenditure
3 2018 restated to reflect the impact of the October 2018 rights issue 
4 Net (debt)/cash represents cash and cash equivalents less borrowings, stated excluding accrued interest and the net-off of unamortised fees and IFRS 9 Financial Instrument adjustments

2018 key performance indicators

EnQuest delivered on its commitment to continual improvement in HSE&A performance. In occupational safety, our Lost Time Incident (‘LTI’) performance remained strong, with many assets recording an LTI-free year.

(Lost time incident frequency represents the number of incidents per million exposure hours worked (based on 12 hours)).

Production was 48.2% higher than in 2017. Increased production from Kraken and Magnus was partially offset by the expected lower production at Alma/Galia and Scolty/Crathes and underlying natural declines elsewhere in the portfolio.

Average unit operating costs were 10.2% lower than in 2017 ($25.6/Boe), primarily as a result of increased production from the Kraken field which has a lower unit operating cost than the Group average.

Higher production from Kraken and Magnus combined with increased realised prices, reflecting higher average market prices, increased EnQuest’s EBITDA.

(EBITDA is calculated on a Business performance basis, and is calculated by taking profit/(loss) from operations before tax and finance income/(costs) and adding back depletion, depreciation, foreign exchange movements, inventory revaluation and the realised gain/(loss) on foreign currency and derivatives related to capital expenditure)

Cash generated by operations was 141.2% higher than in 2017, primarily reflecting improved EBITDA.

Cash capex was 40.1% lower than in 2017, primarily driven by reduced activity at Kraken.

(Net of proceeds from disposal of $nil (2017: $nil, 2016: $1.5 million))

Net debt decreased by 10.9% compared to 2017, primarily reflecting the improved cash-generating capability of the Group with increased contributions from Kraken and Magnus and favourable working capital movements. The Group has remained in compliance with financial covenants under its debt facilities throughout the year and managing ongoing compliance remains a priority.

Net 2P reserves increased by 16.6% compared to 2017, primarily reflecting the Magnus acquisition-related increase.