Summary production statistics and key financials*
|Indicator||1 Jan’ 2018 to |
31 Dec’ 2018
|1 Jan’ 2017 to |
31 Dec’ 2017
|Average unit operating expenditure ($/Boe)||23||25.6|
|Cash capex ($m)||220||368|
|Net (debt)/cash ($m)||(1,774)||(1,991.4)|
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 5.9% lower than 2016, driven by performance issues at Alma/Galia and natural declines at the Group’s other North Sea fields, partially offset by production from Kraken and a full year of production from Scolty/Crathes.
Average unit operating costs were 4.0% higher than 2016 ($24.6/Boe) primarily as a result of the 5.9% reduction in production.
Lower realised prices, reflecting the forward prices available at the time at which the commodity hedge programme was implemented, combined with lower production reduced 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 and the realised gain/(loss) on foreign currency derivatives related to capital expenditure.)
Cash generated by operations was 19.9% lower than 2016, reflecting the impact of commodity hedges and lower production, partially offset by the higher average oil price.
Cash capex was 39.7% lower than 2016, primarily driven by lower spend at Kraken, which came onstream in Q2 2017. $252.2 million was spent on the Kraken development, primarily related to drilling. The remaining spend largely relates to the settlement of deferred invoices in respect of the Alma/Galia and Scolty/Crathes developments and the Eagle discovery.
(Net of proceeds from disposal of $nil (2016: $1.5 million, 2015: $75.5 million)).
Net debt increased by 10.8% compared to 2016, primarily reflecting the ongoing capital expenditure programme at Kraken. Excluding Payment in Kind interest, net debt was $1,900.9 million (2016: $1,768.8 million). The Group has remained in compliance with financial covenants under its debt facilities throughout the year and managing ongoing compliance remains a priority.