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EnQuest PLC on Tuesday posted its pretax profit rising sharply as it benefited from buoyant oil prices while producing slightly more.
EnQuest shares were 6.7% lower at 29.05 pence each in London on Tuesday morning.
Pretax profit in the six months to June 30 more than tripled to $182.6 million from $49.1 million a year prior, the oil and gas producer in the UK North Sea and Malaysia said.
EnQuest expects to pay a windfall tax, formerly known as the energy profits levy, in the UK in 2022 and for the duration of the levy period, which is set to last until the end of 2025. It counts profits from May 26 onwards, but as it did not receive royal assent until July 14, companies whose half-year, quarter or financial year ended on June 30 will pay the profit levy for profits from May 26 onwards in the second half of 2022.
The company explained that if the windfall tax had been effectively in place during the first half of 2022, it would have paid $5.6 million as cash tax liability for the period from May 26 to June 30. ‘As the legislation was not substantively enacted as at June 30, 2022, the tax charge in the half-year results does not include the impact of energy profits levy for the period which will instead be reflected in the second half of 2022,’ it added.
‘The energy profits levy is an additional 25% tax on UK oil and gas profits on top of the existing 40% headline rate of tax, taking the combined rate of tax on profits to 65%,’ the UK government said in July.
EnQuest's revenue grew 74% to $838.8 million from $481.3 million. Average realised oil price surged 43% to $89.9 per barrel of oil equivalent from $62.8.
The company produced 49,726 barrels of oil equivalent per day in the first half, up 7.7% from 46,187.
Further, for 2022, the London-based company expects its average net production to be in the guidance range of 44,000 to 51,000 boepd.
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