North Sea problems to hit output at Enterprisegreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
FRIDAY MARCH 09 2001 North Sea problems to hit output at Enterprise BY CARL MORTISHED, INTERNATIONAL BUSINESS EDITOR RECORD profits at Enterprise Oil were marred yesterday by management forecasts that production this year would suffer an 11 per cent decline because of problems with two North Sea fields. Shares in Britain’s largest independent oil explorer fell 18p to 617p despite news that its net profit had soared from £177 million to £529 million. The gain was mainly a result of high oil prices and a leap in production from an average 214,000 barrels per day in 1999 to more than 280,000 last year.
Pierre Jungels, chief executive, said that Enterprise made the most profit per barrel of any independent oil company and he promised that the stock buyback programme would be activated shortly.
Enterprise will continue to spend heavily on exploration with £135 million earmarked for new wells in the current year. “We are very heavily geared to the drill bit. We spend more on exploration than our competitors,” Mr Jungels said. The company is continuing to target 5 per cent annual growth in production over the longer term.
Last year’s surge in oil output is in part responsible for the expected setback in the current year with production expected to fall to between 250,000 and 260,000 bpd. Depletion of existing reservoirs, combined with setbacks in bringing new fields onstream has left Enterprise in a hiatus. The company has suffered technical problems at Pierce where two wells were put out of action and at Banff where a new type of floating production vessel had to be sent into dry-dock after suffering stability problems.
The temporary shortfall in oil output comes at a sensitive time for Enterprise, which has been dogged by bid rumours. Its rival Lasmo recently succumbed to an offer from ENI, the Italian group. Duncan Goodwin, analyst at Schroder Salomon Smith Barney, said: “The setback is unfortunate and it shows the higher risk facing the independents.”
Enterprise secured an important position in Iran last year with a contract to produce gas from the South Pars field, one of the world’s largest gas accumulations.
-- Doris (firstname.lastname@example.org), March 09, 2001