EnQuest annual profit hit by UK windfall tax and lower oil prices

EnQuest PLC on Wednesday reported lower revenue and attributable profit in 2025, but noted the current geopolitical backdrop reinforces the strategic value of its business.

The oil and gas company with operations in the UK and Malaysia booked $493.4 million in annual pretax profit, nearly trebled from $166.6 million in 2024.

Profit from operations before tax and finance income more than doubled to $648.8 million from $311.5 million.

However, profit attributable to owners of the parent, which is recorded after tax, shrank to $1.6 million from $93.8 million. This reflects the UK government’s two-year extension of an energy profit levy, without which EnQuest estimated profit after tax would have been $125.5 million, with the levy costing the company $104.1 million in the second half of 2025.

Revenue declined 5.3% to $1.12 billion from $1.18 billion on-year, which the company attributed to lower oil prices during 2025.

Enquest estimated an average Brent oil price per barrel of $68.2, down 15% from $80.5 a year before, and a realised oil price of $68.8 per barrel, down 14% from $80.2. The natural gas price per therm rose 5.6% to 88.3 pence from 83.6p.

Cost of sales crept up 6.4% to $837.5 million from $787.4 million, though production was higher than the year prior.

The company’s daily output totalled 45,606 barrels of oil equivalent in 2025, including pro forma Vietnam volumes. This was ‘above the top end of market guidance’, which had estimated daily output between 40,000 to 45,000 barrels.

Reported daily production, which includes Vietnam volumes from July 9, totalled 42,945 barrels of oil equivalent in 2025, up from 40,736 barrels in 2024.

Enquest paid its maiden dividend of 0.616 pence per share in 2025 and on Wednesday proposed a final dividend of 0.801p per share for the year.

EnQuest shares were down 6.3% to 17.38 pence on Wednesday morning in London, but are up 32% over the past year.

Looking ahead, the company plans to push for the introduction of a proposed new oil and gas price mechanism ‘as a permanent, fit-for-purpose windfall tax successor’ to the levy, ahead of the levy’s current sunset date in March 2030.

Enquest noted that Harbour Energy PLC is expected to replace Waldorf as its field partner for the Kraken reservoir.

‘In 2026, Kraken production will be subject to natural field decline and the impact of a short maintenance ’pit-stop’ shutdown planned in the third quarter of the year,’ Enquest added.

The company also is developing a fuel gas import project involving the subsea tie-back of a Bressay gas well to the Kraken floating production, storage and offloading vessel.

‘By establishing an alternative to the diesel currently used to power Kraken operations, this project has the potential to drive a step change reduction in FPSO emissions and operating costs,’ Enquest said, with field development plans ‘at an advanced stage’.

‘Current geopolitical tensions underline the continued reliance of the world economy on hydrocarbons and the strategic importance for countries to have their own domestic oil and gas supply,’ Enquest stressed.

‘The volatility of current conditions reinforces the importance of EnQuest’s focus on disciplined capital allocation, operational excellence and continued diversification of our portfolio. Our focus remains on extracting value from our core North Sea and South East Asian assets while maintaining financial resilience in a market characterised by underlying modest demand growth and elevated supply.’

Chief Executive Amjad Bseisu added that the company had begun 2026 ‘with confidence and momentum’.

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