Results for the year ended 31 December 2018 and 2019 outlook

Summary production statistics and key financials

 20182017Change %
Production (Boepd)55,447    37,405        48.2
Revenue and other operating income ($m)11,201.0  635.289.1
Realised oil price ($/bbl)161.2    52.217.2
Gross profit ($m)275.0   65.7318.6
Profit before tax & net finance costs ($m)290.0  47.3513.1
EBITDA ($m)2716.3   303.6135.9
Cash generated from operations ($m)788.6    327.0141.2
Reported profit after tax ($m)127.3   (60.8)-
Reported basic earnings per share (cents)310.4   (4.6) 
Cash capex ($m)    220.2   367.6(40.1)
 End 2018    End 2017 
Net (debt)/cash ($m)4(1,774.5) (1,991.4)   (10.9)
Net 2P reserves 245MMboe210MMboe15
Net 2C resources198 MMboe164 MMboe18

Notes:
1 Including losses of $93.0 million (2017: losses of $20.6 million) associated with EnQuest’s oil price hedges
2 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 gains/loss on foreign currency derivatives related to capital expenditure
3 2017 reported earnings per share has been restated for the bonus element of the rights issue 
4 Net (debt)/cash represents cash and cash equivalents less borrowings, stated excluding accrued interest and the net-off of unamortised fees

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.