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One of the biggest Scotland-based oil and gas firms operating in the North Sea has announced swingeing cuts to operational and capital spending.
EnQuest’s operating expenditure is due to fall by $150m, or 30%, to about $375m.
With the price of oil now trading in the mid-$20 range, the company wants to limit operational spending to $15 per barrel produced.
It will not restart two North Sea fields it has been developing.
Between them, the Heather and Thistle/Deveron fields produced 6,000 barrels per day during last year.
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Capital expenditure is to be slashed by £80m, to around $150m, and it is expected further cuts will follow, leading to a drop in production.
The downturn in the world oil market has forced the action, and it is expected that other oil producers and supply companies will follow.
The share price for EnQuest has fallen from around 30p in January to 8p. It rose slightly on publication of the plan to cut spending.
The company’s chief executive, Amjad Bseisu, said: “Given the prevailing low oil price environment, we are taking decisive action to reduce operating and capital expenditure in 2020 and beyond.”
He added that reduced production, and no debt repayments due this year, the cash position of the firm puts it in a position “to manage through the current low oil price environment”.