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New oil found in North Sea

EnQuest restates optimism about regional potential after British vote to leave the EU.

By
Daniel J. Graeber
New oil found in exploration well in the central waters of the North Sea, regional company EnQuest reports. File Photo by Maryam Rahmanian/UPI
New oil found in exploration well in the central waters of the North Sea, regional company EnQuest reports. File Photo by Maryam Rahmanian/UPI | License Photo

LONDON, July 1 (UPI) -- With the future of the region in question, energy company EnQuest said Friday it confirmed the discovery of oil at a field in the central North Sea.

"Drilling performance in the central North Sea this year has been excellent, both ahead of schedule and under budget," EnQuest President Neil McCulloch said in a statement.

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The company said it confirmed the discovery of oil while drilling its Eagle exploration well in the Greater Kittiwake Area of the North Sea. The company said it expected the results would show similarity to the nearby Gadwell field, which EnQuest said had an estimated total gross recovery of about 6 million barrels of oil.

A February report from Oil & Gas U.K. warned exploration activity offshore was at an all-time low and there were no signs of improvement. Less than $1.4 billion in spending on new projects is expected in 2016, compared with an average of around $7 billion in the past five years.

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EnQuest this year cut its full-year spending plans to the low-end of its estimate of between $700 million and $750 million, but kept production guidance in place at around 46,000 barrels of oil equivalent per day.

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Following last week's British referendum to leave the European Union, BP, which cut about 600 jobs from its payroll, said there may be some uncertainty moving forward for the regional oil and sector.

EnQuest struck an upbeat tone about the prospects for the North Sea nonetheless.

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"EnQuest believes that its assets offer material organic growth opportunities, driven by exploitation of current infrastructure on the U.K. continental shelf and the development of low-risk near-field opportunities," the company said in a statement.

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