Market report

Oil updates: Enquest, Parkmead, Capricorn Energy


Market close:  The FTSE 100 finished at a 12-month high, driven by encouraging data on America’s economy and a rise in metal prices that lifted miners.

The index rose 20.64 points, or 0.3 % to 7,952.62, taking its monthly gain to 4.2%, its best performance since January 2023 and within touching distance of its all-time record of 8012.5, set last February.


Enquest gushes despite windfall tax

Enquest
Amjad Bseisu: the windfall tax is ‘not good’

One of the North Sea’s largest independent oil and gas companies will deliver a maiden return to shareholders through a $15 million share buyback after transforming its balance sheet.

EnQuest, which also has production in Malaysia, runs the Sullom Voe terminal on Shetland. It has reduced its net debt from $2 billion in 2017 to about $410 million at the end of last month.

The company posted a sharply higher pre-tax profit for the year of $231.8m from $203,214 in the previous year despite suffering a $175m charge from the UK government’s energy profit levy, up from $72m in 2022.

Amjad Bseisu, the chief executive, described the tax situation as “not good”, but spite of that and concerns about an incoming Labour government bringing an end to North Sea drilling, he said that EnQuest saw growth prospects in the UK.

“This will be our first port of call, but we are also looking to expand internationally, perhaps in southeast Asia, where we have operations,” he said. “We do still look at the North Sea as our main fairway, given the size of our business, and we are open to mergers and acquisitions, as well as transactions relating to assets.

“We just hope the long-term jobs value will prevail in the UK and that investment in the oil and gas business in the UK will be part of the calculus for the government going forward. Importing gas or oil does not solve the emission problem.”

Shares in EnQuest edged up by 0.7% to 14p.


Parkmead

Energy company Parkmead said revenue for the half-year fell to £3.4 million (1H FY23: £11.1 million) reflecting the significant fall in average gas prices in Dutch fields during six months to the end of December.

However, lower operating costs resulted in robust cashflow from operations and meant the company swung to a pre-tax profit of £911,000 for the period against a £5.2m loss last time.

Parkmead is evaluating further acquisition opportunities in each of its core areas of activity – renewables, gas and oil.


Capricorn Energy

Capricorn Energy, the Edinburgh-based explorer that underwent a boardroom overhaul last year, posted a $102 million pre-tax loss, an improvement on its $148.5 million loss in the previous year.

The board was cleared out a year ago amid shareholder unrest over a proposed tie-up with NewMed, of Israel.

The company withdrew exploration operations in a number of locations, including Mauritania, Mexico and Surinam to focus on its producing assets in Egypt. Those brought in $201 million of revenue in 2023 on production equivalent to 30,044 barrels of oil per day.

Capricorn, created as Cairn Energy by the former Scotland rugby international Bill Gammell, expects to complete a deal to take a 25% holding in the Columbus gasfield in the UK North Sea before the end of June.

Chief executive Randy Neely said a $50 million special dividend for shareholders would be paid in the second quarter of this year.

Capricorn Energy shares rose 8p, or 4.8%, to 175p.



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