T urning opportunities into value by targeting maturing assets and underdeveloped oil fields
FIRE EXITS FLOORPLAN 1
Agenda ▪ Realising value through capability ▪ 2017 Highlights ▪ Operations ▪ Doing business with EnQuest ▪ Indicative programme of work 2018 2
Continual Improvement Plan – SAFE Behaviours • Embed Life Saving Rules • Deliver new Control of Work system • Update Operations and Maintenance procedures • Improve risk perception awareness • Continue to implement HCR prevention plans • Fully implement Environmental Management System Awareness • Complete ‘Play Your Part’ roll out • Drive improved self monitoring practices • Recognise and share positive HSE behaviours • Continue Safety Reps and E-Reps training • Work with our service providers to learn from and harness industry best practice • Use leadership visits to engage with everyone on Major Accident Hazards 3
EnQuest Growth : from 6 to 8 hubs, a growing & increasingly diversified portfolio Heather/Broom Kraken Thistle/Deveron Magnus The Dons Greater Kittiwake Area Alma/Galia PM8/Seligi SVT 4
Realising value through capability • Field life extension Differential • Production efficiency • Project delivery capability • Wells delivery Low Cost • Supply chain excellence • Capex discipline in projects Operator Financial • Restructuring delivered in 2016 • Targets aligned to cash generation Discipline A relentless focus on Safe Results with no harm to people and respect for the environment 5
EnQuest has delivered strong Compound Annual Growth * CAGR for first seven years will be 17%, based on the mid-point for our 2017 production range 6
EnQuest’s reserve base has also grown considerably 202 215 MMboe MMboe +151 MMboe Contingent Resources (68) 81 MMboe MMboe Production Additions to 2010 to 2016 reserves Net 2P reserves Net 2P reserves at end 2016 2010 to end 2016 start 2010 7
H1 highlights and latest full year outlook H1 2017 ▪ Delivered Kraken first oil on schedule and under budget ▪ Agreed to acquire Magnus/Sullom Voe Terminal Outlook 2017 full year and beyond ▪ Full year production guidance at 37,015 Boepd +/- 10% ▪ To date Kraken well rates above expectations ▪ On course for gross 50,000 Boepd plateau in H1 2018 ▪ Magnus completion anticipated before year end ▪ Substantial potential in existing portfolio, net 2P 215 Mmboe 8
Kraken – Wells ▪ 13 wells completed to date and a further four being completed on DC3 ▪ Total footage drilled: 200,733ft (38 miles) ▪ Gross Reservoir interval drilled: 38,719ft ▪ World record: Longest Optipac (alternate-path) gravel pack - 4,347ft (Jun 2017) ▪ Drilling programme currently 288 days ahead of April 2014 pre-drill estimate as a result of: ▪ Collaborative team approach between: wells, subsurface, subsea; onshore / offshore; EnQuest / supply chain ▪ Batch drilling philosophy with focus on continuous improvement from operation to operation ▪ Use of appropriate ‘value - adding’ technology ▪ Continuing to drive down well cost through supply chain management and drilling performance 9
Acquisition of Magnus Avenue for growth in a capital constrained world ▪ EnQuest is a life extension expert, with the right integrated technical skills, operational scale and high level of operating efficiency ▪ Well placed to extend the lives of Magnus and SVT ▪ Will provide new opportunities for the assets and benefit to the wider UKCS basin ▪ The OGA is focused on Maximising Economic Recovery (‘MER UK’) ▪ This transaction is a very good example of this ▪ EnQuest track record of successful integration of acquisition assets: GKA, Malaysia ▪ Existing operator of three facilities adjacent to Magnus, also potential for economies of scale ▪ Innovative transaction structure aligns interests of partners and is a natural evolution of EnQuest’s business ▪ Recognises EnQuest as a natural strategic operator of maturing assets 10
2018/19 Indicative Activities* Central North Sea and Quad 9 ▪ Continued drilling of Kraken wells (DC4) ▪ DC4 Subsea Installation ▪ Optimising Scolty/Crathes production (Chemical treatments & new pipeline, 2019 execution) ▪ Targeting completion of Eagle development planning ▪ Alma Galia workovers ▪ GKA scale squeeze Subject to budget approval
2018/19 Indicative Activities* Northern North Sea ▪ Thistle and Heather well abandonments ▪ Heather development well ▪ Thistle ESP workover ▪ Dunlin bypass contract award for 2019 execution ▪ Magnus drilling, 3 wells ▪ Thistle Gas Compressor project ▪ £10million of licence to operate capital brownfield project scopes Subject to budget approval
Doing business with EnQuest
Doing Business with EnQuest Supply Chain Code of Practice Becoming a Supplier Committed to full compliance with the Supply Chain Code of Practice to:- ▪ Improve performance ▪ Eliminate unnecessary costs Performance Reviews ▪ Add value and boost competitiveness Audits In support of the Code, our preferred suppliers are registered with FPAL. For more information or to register your company go to www.FPAL.com 14 14
Institutionalising low cost base – Internal & External 2015 2016 2017 2018 H1 H2 H1 H2 H1 H2 H1 H2 Operations Excellence Centralised Procurement Open Book Contracts Supplier Forum Should Cost' Modelling Alternate Sourcing Integrated Logistics Shared Services Org Inventory Assurance Plan Fixed Price Catalogues Aviation Hub Operators Inventory Sharing Marine Hubs Vendor Managed Inventory Completed In Progress Planned 15
2017/2018 challenges and EnQuest expectations Reduce current Transparency OPEX, CAPEX & through open ABEX book contracts Long Manage Eliminate entire term Waste Supply contracts Chain To allow future for investment Post Award Contract Management 16
Doing business with EnQuest Indicative programme - 17/2018 Description Estimated Tender Date Area Lifeboat Maintenance Q1 2018 Operations / HSE Battery Maintenance/Supply Q1 2018 Operations Diesel Engines Q1 2018 Operations Nitrogen and Maintenance Gases Q2 2018 Operations Safety Consumables Q2 2018 HSE Subsea IRM Review Strategy Subsea Liner Hangers Q1 2018 Wells Bridge Plugs Review Strategy Wells Wellhead Maintenance Q1 2018 Wells Suspension Plugs H1 2018 Wells Offshore Solids Control Equipment/Onshore Processing H1 2018 Wells ESPs Strategy Q4 2017 Wells Dons NE Well Service contracts Strategy Q4 2017 Wells 17
Doing business with EnQuest Indicative programme 17/2018 Description Estimated Tender Date Area Ongoing – RFQ’s to be Investigatory services incl. Engineering Services, HSE, Operations integrity etc. issued as and when required Production Chemicals Q1 2018 Operations Pumps Strategy Q1 2018 Operations Platform ROVs Ongoing, RFQs issued on Operations an ad hoc basis 18
Summary EnQuest expects suppliers to: Suppliers should expect EnQuest to: ▪ ▪ Take initiatives and come up with ideas Continue to grow and keep activity levels high ▪ Simplify service delivery processes ▪ Maintain a leading industry position ▪ Reduce cost base through sustainable ▪ structural changes Open to suggestions for changing cost base and improving quality ▪ Challenge entire supply chain ▪ Commit to longer term contracts with suppliers who deliver best quality at lower ▪ Transportation costs cost 19
Contracts & Procurement Contacts Sachli Zare, Manager Purchase to Pay (Dubai) DD: +971 4 550 7129 E: Sachli.zare@enquest.com Barry Bremner, Contracts Team Lead DD: +44(0)1224 975136 E: barry.bremner@enquest.com Lesley Thomson, Contracts Manager Neil Imrie, Senior Contracts Engineer, Subsea DD: +44(0)1224 975350 DD: +44(0)1224 975275 E: lesley.thomson@enquest.com E: Neil.Imrie@enquest.com Nikki Stevenson, Contracts Engineer, Operations DD: +44(0)1224 975484 Craig MacPhee, Senior Contracts Engineer, E: Nikki.Stevenson@enquest.com Maintenance DD: + 44 (0) 1224 975327 E: Craig.MacPhee@enquest.com 20
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