North Sea-focused oil producer EnQuest PLC (ENQ.LN) Wednesday said it swung to a first-half pretax loss as lower oil prices cancelled out higher production.

Enquest reported a pretax loss of $34.6 million for the six months to June 30, compared with a $78.6 million profit in the first half of 2014. A write-down in the value of Enquest's reserves, along with other impairments, reduced earnings by $46 million.

The average production rate in the first half rose 17.3% to 29,665 barrels of oil equivalent per day. Enquest reiterated a full-year forecast of between 33,000 and 36,000 per day, with oil from Enquest's Alma/Galia asset set to boost production soon.

"EnQuest has responded well to the lower oil price environment, delivering a strong performance driven by production gains and cost reductions, both core areas of expertise, and by a well executed hedging program," said Chief Executive Amjad Bseisu .

"EnQuest achieved continuing high levels of operating efficiency in the North Sea and a good production performance in Malaysia, with PM8/Seligi's first H1 contribution. Our two major developments are progressing well and we expect first oil from Alma/Galia within a few weeks," he added.

The company forecast that operating expenditure will come in at around $38 per barrel in 2015 and fall to "the low $30s" next year as its cost-cutting plan takes hold.

First-half revenue dropped to $444 million from $503.8 million. Earnings before interest, tax, depreciation and amortization dropped 20% to $226.7 million.

Net debt stood at $1.28 billion at the half-year, compared with $932.8 million a year earlier.

Source: www.marketwatch.com

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