EnQuest Plc (ENQ), a North Sea oil company, promised production growth of 20 percent a year after finding crude at its Crathes well and deciding to develop the Alma and Galia fields. The shares gained.
Output will rise to more than 40,000 barrels a day by 2014 from as much as 24,000 barrels next year, the company said in a statement in London today. The Crathes exploration well, which the company operates with a 40 percent stake, encountered a 52- foot column of light oil. Wintershall AG owns 50 percent of the well and Ithaca Energy Inc. (IAE) has 10 percent.
EnQuest is bolstering output both by making new discoveries and extracting more from older fields. The Alma and Galia development, which will increase the company’s reserves by 29 million barrels of oil equivalent at a cost of $850 million, includes the U.K.’s first oil field, which started production in the 1970s.
“The Alma and Galia development shows the continuing growth of EnQuest and the breadth and depth of its capabilities,” Chief Executive Officer Amjad Bseisu said in a statement. “With current technology field life can be extended significantly. This type of opportunity fits the EnQuest model of finding fresh opportunities in mature assets.”
EnQuest rose as much as 13 percent to 102.8 pence in London, the most since the company was spun off from Petrofac Plc and Lundin Petroleum AB in April 2010. Shares traded at 100.4 pence as of 9:56 a.m. local time.
The company can fund the Alma and Galia project from existing cash and cash flows, Chief Financial Officer Jonathan Swinney said in a telephone interview. The company has money to pursue further acquisitions, he said.
EnQuest also said today that it will acquire a 40 percent interest in Talisman Energy Inc. (TLM)’s Kildrummy field, which may contain 40 million barrels of reserves.
The company’s stock has declined about 28 percent this year. On Sept. 5 it trimmed 2011 production guidance to 23,000 to 24,500 barrels a day from a previous estimate of 26,500 barrels because of lower-than-expected output at two wells near the Shetland Islands.
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