EnQuest (ENQ)

Sector:

Energy Producers

Index:

FTSE Small Cap

12.32p
   
  • Change Today:
      0.30p
  • 52 Week High: 17.02p
  • 52 Week Low: 10.34p
  • Currency: UK Pounds
  • Shares Issued: 1,872.10m
  • Volume: 2,551,385
  • Market Cap: £230.64m

EnQuest downgraded by Barclays despite rise in oil prices

By Bianca Boorer

Date: Friday 23 Sep 2016

LONDON (ShareCast) - (ShareCast News) - Barclays cut its price target on Enquest shares, the UK's largest independent oil producer in the North Sea, and downgraded them from 'equalweight' to 'underweight', on the expectation that the funding options open to the company would dilute owners of the stock.
The broker slashed its price target for the firm's shares by 23% to 34p.

The downgrade comes despite Brent oil futures having recovered from the multi-year lows of $27.88 per barrel plumbed on 20 January.

"The company's need for additional capital if oil prices remain $45-55/bbl through 2017 lead us to the conclusion that equity investors may face further pain before the company is optimally positioned to gain any of the potential upside that a rising oil price outlook can offer the North Sea developer" said analyst at Barclays James Hosie.

Enquest's leveraged exposure to an eventual oil price recovery was undeniable, yet far from unique in the sector, Hosie added.

He estimated that EnQuest required around $200m in additional capital despite a successful reduction in costs per barrel in 2016 of 45% compared to 2014.

That, he said, was because the firm had "minimal headroom to allow for operational issues or a slower recovery of oil prices".

The company had held discussions, now terminated, with possible buyers for a partial divestment of its Kraken development in order to bolster the balance sheet.

However, according to the analyst buyers' unwillingness to assume higher oil prices in asset valuations meant that any sale could be dilutive to his 46p per share estimate of the company's core net asset value.

Furthermore, any transaction that reduced the company's reserves significantly would need to approved by its lenders, Barclays said.

The analyst applied a 25% discount to his estimate of the shares' core net asset value (NAV) to arrive at his new target price, reflecting the potential dilution of the company's funding options.

Hosie forecast Enquest's earnings per share would recover to 0.28p in 2016, after a loss of 0.98p in the prior year, but expected the company's EPS to fall back into the red in 2017 to reach -0.22p.

The share price fell by 3.04% to 26.18p at 0947 BST.

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EnQuest Market Data

Currency UK Pounds
Share Price 12.32p
Change Today 0.30p
% Change 2.50 %
52 Week High 17.02p
52 Week Low 10.34p
Volume 2,551,385
Shares Issued 1,872.10m
Market Cap £230.64m

EnQuest Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
99.31% above the market average99.31% above the market average99.31% above the market average99.31% above the market average99.31% above the market average
94.44% above the sector average94.44% above the sector average94.44% above the sector average94.44% above the sector average94.44% above the sector average
Price Trend
69.2% below the market average69.2% below the market average69.2% below the market average69.2% below the market average69.2% below the market average
24.68% below the sector average24.68% below the sector average24.68% below the sector average24.68% below the sector average24.68% below the sector average
Income
63.59% above the market average63.59% above the market average63.59% above the market average63.59% above the market average63.59% above the market average
12.5% below the sector average12.5% below the sector average12.5% below the sector average12.5% below the sector average12.5% below the sector average
Growth
85.48% below the market average85.48% below the market average85.48% below the market average85.48% below the market average85.48% below the market average
95.92% below the sector average95.92% below the sector average95.92% below the sector average95.92% below the sector average95.92% below the sector average

What The Brokers Say

Strong Buy 1
Buy 1
Neutral 2
Sell 0
Strong Sell 0
Total 4
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

EnQuest Dividends

No dividends found

Trades for 31-Oct-2024

Time Volume / Share Price
16:35 164,268 @ 12.32p
16:35 79 @ 12.32p
16:35 20,246 @ 12.32p
16:35 2,048 @ 12.32p
16:35 1,192 @ 12.32p

EnQuest Key Personnel

CEO Amjad Bseisu
CFO Jonathan Copus

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