EnQuest PLC (3EQ.F) Earnings Call Transcript

Good afternoon, ladies and gentlemen, and welcome to the EnQuest PLC investor presentation. [Operator Instructions]. Before we begin, as usual, we would just like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to Craig Baxter, Head of Investor Relations. Craig, good afternoon, sir.

Thank you very much, Jake, and good afternoon, ladies and gentlemen. Thank you, everyone, for joining. Welcome to today's retail shareholder presentation. As Jake's already laid out, my name is Craig Baxter, for those of you who don't know me, I'm the Head of Investor Relations and Corporate Affairs at EnQuest. The purpose of today's meeting is to provide an additional opportunity to you as a current or potential shareholders of EnQuest to engage directly with our story and to enable you to ask some questions of me about the business or any pressing concerns that you have. With that in mind, I will start with an overview of our global footprint and strategy. So EnQuest is an independent energy company. We have operations which are focused in the U.K. North Sea. That's been part of our DNA since we formed back in 2010, and we've got an expanding operation across Southeast Asia. When we were first listed back in 2010, our foundations were based on acquiring mature and underdeveloped producing assets. And we did that primarily from the majors and super majors that were operating in the North Sea at the time. We've also repeated that model in Malaysia, which I'll talk more about. Our expertise is founded in late-life asset management. We drive efficiencies, we optimize operations, and we do that in order to extend the useful lives of all the assets that we touch. We have a very, very strong operational track record. And in 1H 2025, we yet again delivered exemplary production efficiency of 89%, and that included a 5-week third-party outage of infrastructure. Over the years, our capability mix has expanded. It's -- we now -- we maximize recovery of oil and gas through top quartile drilling and major project execution. And we are proud to be recognized as a secure leading decommissioning operator. As I've mentioned, in the past 12 months, we've expanded our Southeast Asia business building on the strong reputation we have forged over 11 years of successful operations in Malaysia. In fact, with the recent acquisition of Harbour Energy's Vietnam business, we now have 7 assets in production with material reserves and resources in place. Importantly, we operate nearly all of our assets, so we have the opportunity to deploy our operating expertise to maximize value. In the U.K., we're primarily focused on delivering growth through acquisition, and we have a strong balance sheet from which to transact with $578 million of liquidity in place at the half year. By lowering costs and improving uptime, we are able to run our assets for longer than they would have run in the hands of their previous owners. Since our inception, we have extended the useful lives of all 9 assets which we've operated. As we look to transact, this capability is more important than ever and serves as a reminder to interested sellers that EnQuest is a safe pair of hands to take on established assets. We believe our combination of assets and core capabilities sets us apart from any of our peers as we were able to provide an offering across the entire energy transition spectrum. Turning to Southeast Asia, first of all, we have been really active out with the U.K. over the last 12 months, adding scale to our business across Southeast Asia, conditions there are conducive to investment across the asset life cycle. So you'll see a bit of a mix of assets here. In the U.K., we're very much focused on established mature assets moving towards the end of their lives. But you'll see across Southeast Asia, we've got a wider spectrum of opportunities. Over the past 12 months, we've executed 5 growth transactions in the region. And we've stated clearly now that we see this part of the business reaching 35,000 barrels of oil equivalent production by the end of this decade. And the slide here aims to kind of step you through that. These transactions include a full corporate acquisition. That's the Harbour Energy business in Vietnam, which brings with it flowing barrels, just over 5,000 barrels a day at the moment. We've got the development of existing infrastructure to unlock significant gas volumes. So that's in our established Malaysia asset, whereby we're now accessing additional gas through Seligi which we will be able to produce through minor modifications to existing infrastructure, and that will serve Peninsular Malaysian demand and increased EnQuest net production by around 6,000 barrels a day, net to us. Now we announced that a while back, but that doesn't mean we just announce it and rest on our laurels. And in fact, we've actually done a lot of work on this project and we're accelerating that gas provision. We originally said it would be 3Q 2026. We're now looking to have that up and running in the early part of next year. We've also got some exciting developments. Now these are focused in Brunei and in Malaysia, where we've got the DEWA Cluster. And these are proven reserves, but they need a development concept, and that's where EnQuest has come in. So we've got DEWA whereby we're the operator. And that's looking -- the first phase of that is looking like it would be about 7,000 to 7,500 barrels of oil equivalent a day to us. And in Brunei, we've got the option there of a development that looked like about 12,000 barrels a day to EnQuest net. So in Brunei, currently, we hold 100% of the license, but we're working closely with the Brunei government, and we expect to form a 50-50 joint venture company with them in the short term. Sitting alongside these very defined clear production adding opportunities, we also have an exploration appraisal opportunity in Indonesia. Another new country entry for us over the last 12 months. And this is pretty exciting in that we are partnering here with the BP Tangguh partnership, and we're very close proximity to the Tangguh LNG plant. So essentially, that partnership comprises of all the Japanese LNG players. And it's a great option value for EnQuest, we are the operator. This is the fruits of labor as we've talked about for a couple of years now in terms of setting up joint study agreements in Indonesia. And we're really excited about the opportunity and with working with our partners to see what is possible as we look to access the, in excess of 100 Tcf that the government is very confident is in place. I think it's fair to say that this is a crystallization of efforts that we've made over the last 10, 11 years of successful operations in Malaysia, whereby we've been twice named, consecutively named Malaysia Operator of the Year. And sometimes these things sound a little bit glib, but that's a really important data point for our journey in Southeast Asia because actually these transactions have been book-ended by the original and then the follow-up successive and Operator of the Year awards. And I think what it demonstrates here is that the way in which EnQuest has gone into Malaysia, the way in which we've gone about our business, our operating credentials, the way in which we've dealt with the government means that we have a very strong relationship and reputation in country. And of course, PETRONAS' feedback and kind of they're vouching for us travels very well in the region. So I think we're seeing the fruits of those labors now. And it's worth saying that this -- we don't stop here. We've laid out a plan to 15,000 barrels a day next year by 35,000 by the end of the decade, but we don't rest on our laurels and the Southeast Asia team continues to deliver against their growth aims and they intend to build on recent deal momentum with further M&A. We'll just move into some slides on the sort of financial robustness of the business, which I think it's really important to touch on at this time. As a reminder, and again, for those of you who are new to our story, we've done a lot of work over recent years to simplify and strengthen our financial position. In fact, we've worked very hard to reduce our debt by $1.6 billion since its peak in 2017, and we've since been able to simplify our capital structure. As shown here, we've got a very simple and flexible arrangement with our RBL. And following the successful tap of the high-yield bond this time last year, we removed the term loan facility that was in place until that point. We're now left with simply the RBL, underpinned by our high yield and retail bonds. It is from this platform that we are looking to grow the business while at the same time providing commodity and geographic diversification. We're focused on value-accretive deals, which will increase our capacity to return capital to shareholders. Well, we're fortunate in, I guess, in the EPL environment, we don't have any major commitments related to capital projects. We are rational investors, and we'll always look to execute fast cycle investments where possible. We're also clear that we can only maintain the top quartile production efficiency across our portfolio that we've become accustomed to by ensuring that we optimize asset investment. I won't spend too long on this slide, but I think it's worth reminding ourselves of the key components of cash generation in our business. It's something I get asked about quite a lot in investor conversations and when you guys e-mail me. So I thought worth putting this slide up to remind you of the key components. As the chart on the right lays out, we generated $33 million of free cash flow in 1H '25 million, and we used that to pay the $15 million made in dividend and also a deposit on the Vietnam acquisition. The rest went to paying down debt. With reduced commodity prices and the continued challenges in the U.K. fiscal system, we have a very solid financial base, but we must now put that to work and scale the business through acquisition. I think it's also worth saying this presentation will be available on investor meets. If you want to go back and remind yourselves of some of these components of the financials, then that will be available for you to do so. This slide outlines our expectations for the outturn of 2025 and our priorities as we look next year and beyond. We shouldn't overlook the fact that we are again on track to meet our stated targets, both in terms of production volumes and cost. And that is testament to the great work being done across the business by teams in all departments. Delivery against targets provides the foundation for shareholder returns and the wider capital allocation framework. There is, of course, much work to be done to ensure a positive conclusion to the year, and we are never complacent. However, we do look forward, and we are concluding a program of asset strategy sessions, which sit alongside the normal course of group business planning and the budget process. These strategy sessions provide a point of focus for the significant opportunities across our major assets, which we'll touch on in a second, and we're excited about getting after them in the new year. With that in mind, I propose taking a quick canter through the group operations. So this summary slide, I won't spend too much time on, I'd rather delve into each asset individually with you. But it's worth noting some of the high spots here. I mean I referenced early on, we've got a group production efficiency of 89%. But it's worth noting that without a third-party infrastructure, over which, of course, we've got no control, that figure would have been 94%. And that is really exceptional. You're talking about the very, very top end of the sector performance. When we look at other responsibilities we have beyond safety, of course, and production and financial. We are, of course, a responsible operator, and we are committed to all aspects of the energy transition. In fact, we say very openly that we believe that all of the areas of the -- of our business very much interact with the energy transition. So we are still committed to national decarbonization objectives where we're running well ahead of the NSTD, the North Sea Transition Deal, and that's the national target, which has been set by the regulator, the NSTA. I think we're a 40% reduction versus the 2018 baseline for the U.K. We're also progressing material projects at SVT, which look to decarbonize, plus we've got some really exciting opportunities still on the slate for Veri Energy, our wholly owned subsidiary. Another area, which I'll touch on in a little bit more detail is decommissioning, which is becoming obviously a much bigger part of the North Sea story as assets are unfortunately reaching end of their lives. And EnQuest has carved out a tremendous reputation and really is delivering the top end of the sector in terms of decommissioning performance. It's very useful and a very good calling card to be considered the foremost, I guess, decommissioning operator in the North Sea, particularly when we're looking to transact in this basin. I'll touch on some of the asset highlights. There might well be asset-specific questions that pop up in the Q&A, which I'm happy to address. But I'll pick out some highlights for me that I think are really important to communicate at this time. So starting off with Kraken, which is really an exemplar asset. For those of you who are less familiar with EnQuest in the sector, you're maybe just tuning into an oil and gas company for the first time. It's really important to note here that your operations are fundamentally underpinned by your ability to keep your asset and your equipment online and producing. And that's what we mean by production efficiency. So when looking at the North Sea, it's more often than not, you would find -- you'd have fixed platforms and you have floating platforms, which are effectively vessels like the FPSO at Kraken. And in the norm, fixed platforms have higher uptime. Now Kraken bucks that trend, Kraken production efficiency has been around 96% in the first half of the year, and that continues a long-running track record of 90-plus percent uptime on this vessel. And that is absolutely sector leading performance. It's fair to see that it bucks a trend so much actually about 30% above the NSTA's benchmark for what they would expect to see and from what the other stats of floating hubs across the North Sea. So really outstanding performance by the EnQuest team working alongside the Bumi Armada team. When we look at Kraken, we're in this period now of very well-established operations. As I said, we're ticking along at 90-plus percent production efficiency, and that is absolutely fantastic. But the team, again, does not resonate with laurels and continues to look forward to how we optimize Kraken. And the way I would sort of put this forward is we're now entering a new phase of Kraken operations, in the very early days, you're kind of -- you're feeling around with the equipment you're trying to make sure everything works properly. We're now 8 years in, and everything is working extremely well and very harmoniously. What we're looking at now is how you optimize the delivery of Kraken and how you optimize what the rest of work can deliver. With that, you read in enhanced oil recovery, which is a very exciting project we've been talking about now for a while. And this is being progressed right now. We're very much in the testing phase. We're looking at polymers. We're looking at the deployment options we have. And by that, really what I mean is we're looking at the reservoir plumbing and deciding the best way to inject and move the polymer through the reservoir in order to sort of sweep the hydrocarbons in an optimal way. So that takes time. And we certainly don't want to make a misstep there, right? I mean we've got very high performing kits. We've got very high-performing topsides, and we don't want to do anything that jeopardizes that. However, we are moving this forward. It's something we're very excited about in the business and we could see a path to sort of phased deployment of that kicking off next year. Another big development at Kraken, again, it kind of speaks to this transition angle that everyone, of course, has to take now. And certainly, it talks to our position as a rational investor. So we have a neighboring license, which is called Bressay. It's another heavy oil license. But Bressay sits with -- above the oil, it sits with a gas cap. And that gas cap is -- provides us with a big opportunity for Kraken. So essentially, what EnQuest is proposing to do is produce that gas cap via a single well gas tieback and transport that gas to Kraken, where we will look to essentially displace the diesel that's currently used to power Kraken and use gas instead. Now that's got a number of benefits for EnQuest and the NSTA and the environment. Essentially, what it does is it reduces emissions significantly. So it would take about 80% of the diesel we're currently burning on Kraken out of play because you'd be replacing that with gas, which is a cleaner fuel. It would lower operating costs in the long term of Kraken. And it would also derisk the future Bressay oil development by -- because producing out the gas cap would make it easier to access the oil. So it's the kind of investment we would do all day every day. We have done everything we can at this stage. We've submitted a field development plan to the NSTA, and we're waiting on regulator feedback on how we progress. But we're very much looking forward to moving this forward. On a cost standpoint as well, Kraken is also looking even better than it was previously because of a contractual step down in the lease rate. So previously, net to EnQuest, we were paying around $115 million. That's $115 million per annum to lease the vessel from its -- from Bumi Armada-- but as of 1 April 2025, that stepped down by 70%. So on an annualized basis, that's about $80 million per annum in saved cost. In the U.K., certainly, our other sort of pillar asset is Magnus, very, very different to Kraken. It is one of the sort of grand old ladies in the North Sea. It's over 40 years old, and it is a fixed platform. This is an asset we purchased from BP back in 27 (sic) [ 2017 ] and finalized the whole 100% in 2018. And this is an asset where we brought to bear our operational expertise. And we've really optimized this asset from where it was originally. It was a good asset. It was always a good asset, but it was sort of non-core to BP. They were on to looking at other things. But when Magnus came into EnQuest, of course, we were able to apply a great deal of focus and our expertise to get it working as it should. So what we've done at Magnus is we've lowered operating costs from about $60 per barrel down into the mid-20s. And what you'll see on this graph on the top right here is that we've massively increased production efficiency from sub-60% when we took the asset on to high 80s is the norm. And even with the 5-week infrastructure outage that we had -- third-party infrastructure outage -- that we had earlier this year, we were still in the mid-70s. You strip that out of things, we'd be in the mid-90s and Magnus would be operating at absolutely top end levels. Having seen that outage however, we've had to deal with that. And in doing so, we proactively executed all the maintenance scopes that we planned for later on this year. So there will be no Magnus shutdown now, no planned shutdown until into 2026. The team has also done some really good work in optimizing the reservoir at Magnus. We've seen good drilling completed in the first half of this year with wells coming on at or above expected rates. And we've also optimized water cuts. So we're now seeing water cut at this asset down at around 85%, which is equivalent to what it was back in 2017. When you add those things together, strong uptime, new wells coming on well and optimizing the reservoir performance, that's when you see peaks and we've seen an oil production, so not gas, but oil alone tipping at 19,000 barrels a day during July, and we've seen the best or 3-month quarterly rate since we did back during overtime. So really, really good performance at Magnus by the teams across EnQuest and something that really speaks to the capability that we can bring to late life assets. Looking at Southeast Asia, we obviously touched on the growth opportunities and the growth transaction we completed over the last 12 months. But it's worth pointing out that the core operations in Malaysia are also going very well. We've completed a 4-well infill drilling program this year, and we've also done quite a lot of well restoration work, which is all part of our strategic plan to increase production at PM8/Seligi, and we expect to see an increase in 2025 versus 2024. We've also got a really strong safety record across the business, and that's exemplified in Malaysia as well, where we now hit 6 million man-hours without a lost time incident. As I touched on, one of the opportunities and the first one that really yields additional barrels beyond the purchase of Vietnam is the Seligi gas enhancement that we've done. And again, we're looking at adding about 6,000 barrels of oil equivalent in Q1 of next year. Touching on Vietnam. Obviously, this is the most recent acquisition that we've completed and this is buying exactly what we said we would. We're buying flowing barrels with robust decline curves and little or no CapEx requirements. And that's exactly what Vietnam delivers. It's a really good asset. It was a strong asset within Harbor Energy's portfolio. It was just subscale. They're moving on to bigger developments. And as they've grown as a company, this has become non-core to them, but it's exactly the type of asset that EnQuest would buy day in, day out. We've seen good process through the completion. We've seen production as expected, possibly even a little bit higher than expected, we were at 5,135 Boepd as of 1H. And I think we're very pleased with having a highly motivated, highly skilled team in-country team have been together for quite a long time, and they are now super motivated by having a new owner that is very much motivated to enhancing and growing the production, both from Block 12W, but also doing more things in Malaysia to keep them occupied. So I think all in all, this is the kind of purchase we would do all the time. We have -- there's some great deal fundamentals as well here. You've got a breakeven of around $60 -- sorry, $40 per BOE. That's the life of field breakeven. And oil is still attracting a premium of about 10% to Brent. That's coming from this asset. So there's lots we can do both on the asset. We're already looking at drilling options, and we're looking further around the field itself where there's multiple gas discoveries and other targets. And then, of course, we now have an office in a base in Vietnam. So we're looking to see what else we can do in country. Back to the U.K. now. And in terms of other assets that we operate, we are the operator of the Sullom Voe Terminal, which is a strategically important piece of infrastructure in the U.K. And it's kind of got 2 facets to it now the life of SVT. On one hand, we're still producing we're through putting oil and gas through these facilities, albeit on a much reduced scale from peak production back in the early '80s. But we are producing 100% service availability to our customers. And we're doing 2 major projects at the moment. A new stabilization facility and then connecting the site to the U.K. grid. And together, those will reduce the carbon footprint of SVT by over 90%. Now the relevance to that, of course, is that helps us from a carbon footprint point of view, but also from an operating cost point of view, and it sets SVT up to provide service to our customers for decades to come. The other side of life at SVT is looking to the future, and we are looking at a number of renewable and decarbonization opportunities through our Veri Energy subsidiary. And we're approaching FID on our electrification project, and that's onshore wind. So we'll be building a couple of turbines at site. And again, that will -- even beyond the 90% decarbonization, that will supplement the power requirements of the terminal with green power. We talked a little bit about our half year results around carbon storage. So that's been like the flagship project for Veri and SVT. And I think there's still huge optimism around the potential for that at site. But the government at the moment is kind of pointing to the Track 1 projects that are ongoing, and it's going to be, I think, quite difficult for us to see funding over the next couple of years. Now importantly, EnQuest itself is not asking the government for subsidies here. We've got a merchant model which stands on its own 2 feet. However, what we do know is our potential customers, so stranded emitters across the U.K. and into Europe, they're going to need some sort of help from governments across Europe in order to bridge the gap between carbon capture and storage as one of their options rather than just paying the tax associated with emissions. So there's work to be done there. Our team are still progressing what they can. And we're still confident that there's a project there and it's got a really optimal future at SVT. There's so many natural attributes of the terminal that set up well for this type of project going forward. Let me touch now on decommissioning. So another really important part of the energy transition, particularly in the U.K., albeit we're doing a lot of decommissioning activity in Malaysia as well. I think it's fair to say that we are considered, I guess, the preeminent and certainly a leading decommissioning operator in the North Sea. Having completed now 81 well plugging and abandonment scopes since 2022. So using our NSTA data, that's more than 1/3 of the activity that's been done across the Northern and Central North Sea and that's been done by EnQuest as a single company. So really quite impressive. And we're also doing each scope on average, about 35% below benchmark cost. So that's a really important capability as we look forward to taking on more assets in the North Sea. I mean, if you're a sailor in the North Sea, what you really want is, of course, you want a consideration for your asset, but you want to make sure it's being handed on to a responsible operator, particularly one that's going to be able to decommission it successfully and safely at the end of its life. In terms of the 2 major projects we've got ongoing in the U.K. Thistle and Heather are both reaching their end stages. This, we expect to disembark early next year with the topside lift to follow. And actually, I don't know, hopefully, some of you have seen on our website the video of the Heather topside lift, which maybe I'm a bit of an engineering geek but it's pretty phenomenal to watch the capability that exists in this basin and to watch a 15,000-tonne structure being lifted of its platform in 14 seconds and it was pretty impressive. Of course, this is what we bring to the party when it comes to negotiations around taking on new assets, and it's a very, very important part of our business. Looking forward, we've put a contract in place. It's got multiyear options through the next phase of our decommissioning requirements. So that's a package of subsea wells, which are associated with the likes of Alma/Galia and the Dons and Broom, which have already been CoP-ied. Alma/Galia and Dons, the floating production facilities have been moved away long ago, and now we're going to get after the subsea wells. These are very low integrity risk wells, but now we get after them in a safe and efficient manner. That's the kind of formal part of the presentation, what I want to cover today. I'll leave this slide on rather than going to a generic Q&A slide, I'll leave this slide on which talks to some of the proof points around EnQuest and our capability and really outlines why we're well positioned to pivot to growth at this phase in our life. And at that stage, I will now bring Jake back in, and we will go through the Q&A, if that's possible.

[Operator Instructions]. And Craig, at this point, if I may just hand back to you to read out those questions and give your responses where appropriate. And if I pick up from you at the end, that would be great.

Absolutely. Thanks very much, Jake. And there have been a lot of questions submitted while I've been talking. But what I'll do first of all is there was a number of investors also who took time to presubmit questions. So I will go through those, first of all, then I'll come to the questions that have been submitted live and there's bound to be some crossover. So bear with me just a second. So the first question that we submitted was, please, can you elaborate on the U.K. government's involvement with creating this new tool to revitalize the fiscal system? Is this just a proposal presented to them or have they helped create it? Are they on board with it? So I think that's a really good question. It's obviously very timely. So we're now in a position whereby we know that the government in the U.K. is going to announce its autumn budget statement on the 26th of November. But what we also now know is that they're going to present a North Sea strategy around the same time or potentially a little bit before the budget, which is going to outline -- our belief is -- it's going to outline the outcomes of the 2 consultations which took place this spring. The first of which was about building the future of the North Sea, which related primarily to licensing and new developments in the North Sea. And the second of which was around the fiscal structure, which taxes North Sea oil and gas companies. So I'll touch probably primarily on the fiscal here because I think that's the specific question. And what I would say is it was a really well-run consultation, myself, Amjad, Jon Copus and Steve Bowyer, we're all heavily involved in it. And I think we'd all agree it was a very well-run process by treasury. We had certainly had our chance to input, which we did so on behalf of EnQuest and also we did as part of combined sector representations by OEUK. But to answer the question, I would say, absolutely, the government and treasury was very much at the table. They were very involved. I think it would be fair to say they came with some preconceptions and some preconceived ideas but they were very willing to talk around those, and we're very open to areas whereby the likes of EnQuest and our sector peers were promoted a different view. I think what I would say is that all parties have walked away with a fairly clear shared understanding of what comes next. So as the government calls it the EPL successor regime, and we think it works. So we think there will be a permanent component of the U.K. tax system, which addresses windfall pricing and windfall pricing will be redefined. It will be defined using government parlance, it's unusually high prices. And what we've really sought to clarify there is let's take a motion out of this and use mathematics. So for example, if you were to use a single standard deviation from the historic average, then you're talking about $94 a barrel. And I think that's the kind of level we're talking here in terms of a threshold at which a windfall would be designated. But importantly, only the amount of, whether it's revenue or profit, only the component above that threshold would be taxed. So it's a top slice tax as opposed to EPL at the moment, which taxes you entirely based on whether you're above the threshold or not, and we could get into all the issues at the moment. Of course, we're significantly below the oil threshold of the EPL. But yes, the dual lock, gas and oil triggers mean that we're still operating under an EPL environment. I think in terms of the mechanics of where we'll land on, we feel positive and confident that we'll land on a position that works for government. It works for our industry and it works for EnQuest. And we believe it would stimulate significant investment versus where we are today. The reality is it doesn't work if we wait till 2030. We were quite forthright in our half year results where we said we need an answer, we need an acceleration of the response. And we believe government now has the tool to do that. The sector is losing 1,000 jobs a month, and that can go on. We need to stimulate investment now. And all of this will do is increase tax revenue for the exchequer. So we see it as a win-win situation. We're hoping and we're cautiously optimistic for some positive news in the autumn statement or immediately before it. But ultimately, we know we need to change in the short term. The second question relates to the Vietnam purchase, and says that in relation to the Vietnamese assets acquired officially in July, the production figures were used in the half year results. Was the financial metrics/profitability merged into the half year results? The answer to that is no. We showed production with and without the 1H 2025 impact of Vietnam. And that was just to give investors and the market a view where we were without it, which is our reported numbers of over 38,000. And then we added in Vietnam to display that Vietnam was as expected, adding over 5,000 barrels a day. The transaction completed in early July, so no financials at all were included in the 1H numbers, other than a small deposit of about $3.5 million that we paid in 1H upon agreement of the deal. We paid the remainder of that $25.7 million consideration. So when you strip off the deposit that was around $22 million, we paid that upon completion in July. Next question, thinking about the next 24 months, what is the breakeven range anticipated to be taking into account CapEx, is it expected to fall between $50 and $55 per barrel. So we don't give specific breakeven forecast that could be construed to be a profit forecast. But we do provide all the component parts for investors to construct their own view. And I've kind of covered some of these already during this presentation. So we have pro forma guidance, including a full year of Vietnam, we have guidance in the market of 40,000 to 45,000 barrels of oil a day. You can apply your own view on price on that. We've got -- we've reaffirmed our guidance. So we've got $450 million of OpEx, again, including $50 million of pro forma Vietnam OpEx. We've got circa $190 million of CapEx and $60 million of AbEx. Beyond that, we've got interest costs, which are outlined on our website. We have Kraken lease costs, which I've explained earlier on, kicked to a much lower level earlier this year. And we have the Magnus profit share. So those are the key components to get you there and should give you a pretty good idea of where breakeven sits. Next question, the cash and undrawn facility stands at $577 million. How much of this can be tapped to weather sustained negative cash flow in the event of low oil prices? So we're obviously in a period today of low prices, I think we're below $62 a barrel, the last time I looked. But to be honest, we don't expect to endure sustained negative cash flows. We've got a demonstrable track record of tailoring our activities and costs to the prevailing price environment. The best example of this was that we remained significantly cash flow positive during COVID, a time when oil hit lows that are well beneath where we are today. And we did that by focusing on must-do work, safety critical production, protecting work and the sort of nice to have got deferred. Now that allowed us absolutely to trim budgets and trim OpEx per barrel and stay profitable. But there's a balance to be struck there. And we're very, very conscious of that balance in all our decision-making. So when we did that in 2020 under the sort of crazy world that we were in with COVID, the fact we couldn't get people off to some of our platforms as well had an impact. But what we do is, yes, we cut cost, but we also reduced uptime because we needed to -- we created a backlog of work that we needed to then get after. So there's a balance to be struck there, right? We are very, very adamant that we must keep our production efficiency where it is. And in order to do that, you've got to invest in these assets. So there's a balance to be struck, but we believe we're very well placed to do that. We've also got a robust hedging program in place. So that obviously helps us in periods of low commodity prices as well. And the question also referred to liquidity. So of our state liquidity, we've got cash and cash equivalents of over $330 million at the half year, with the balance of that $578 million coming from the undrawn RBL headroom. And these funds are in place. They are there for us to use to provide a strong platform from which to transact. Moving on to the next question. Actually, this is -- this one kind of aggregates a number of questions around M&A and the time line for us to execute our U.K. transaction. Another specific question asked how many oil and gas deals we're currently progressing at this stage. So what I would say is we're busy. We remain engaged in discussions across a range of options. Everything from asset packages, combinations and corporate transactions. The Board, which obviously includes Amjad and Jonathan as well and also the executive team, which Amjad runs, are totally clear that the growing the U.K. business is our #1 strategic priority. In terms of time line, I'm afraid I can't give you the answer that I'm sure you're all hoping for. And unfortunately, we're not in control of both sides of the equation here. All we can do is make an offer or offers to sellers, which compel them to agree a sale. One thing we can say categorically is we are ready to transact today. The business is set up to transact. We have the funds ready to deploy. We've just talked a little bit about liquidity that's in place. And there's a huge motivation across the whole organization to do so. I mean my colleagues across the business are very excited and would love to bring new assets in to get their hands on into this organization. So there's alignment and a total motivation across the business. What we won't do, however, is abandon the disciplined approach, which is fundamental to all of our key decision-making. We're committed to value. Okay. Next question. There are 2 questions focused on major projects, covering Kraken EOR, drilling at Kraken, Magnus reservoir opportunities and then the projects that we've lined up across Southeast Asia. To be honest, there is an assertion within the question that we are not accountable to shareholders or we don't demonstrate ourselves to be accountable to shareholders for delivery of our plans and that dates consistently moved to the right. So in answer to that, I guess I'd start by saying that we're very proud of our commitment to delivery and I think we've done a very good job of delivering against our stated targets over a number of years. Beyond Kraken drilling, which was deferred, but not through our own choice, it was deferred because our partner has a [ parent ] that's in administration, and we simply couldn't get the approval to move that project forward. I mean beyond that, we've executed all of our recent drilling plans, including well P&A across the various decommissioning projects, and we've done that across several years. In addition, we're reaching the final stages of major infrastructure projects at SVT, the new stabilization facility which will be online early next year is that by itself is reducing terminal emissions by about 80%. You remember I said overall, the program will take care of more than 90%. The NSF alone will take care of 80% of the current carbon footprint. And we're also progressing to a final investment decision on the project, as I mentioned, to build the wind turbines, and we expect that decision to be taken in the early months of next year. As I mentioned earlier, we've also submitted a draft field development plan for the Bressay tie-back, the gas tie-back to Kraken, and that's with the regulator. So that's logged and lodged. And we're also -- we're excited about EOR, as I mentioned earlier on at Kraken. So we're advancing testing. We're progressing everything here. I mean this isn't about delaying. This is about making sure that we make the right decisions for the asset and making sure they don't compromise the exemplary performance that Kraken is producing at the moment. So basically, there's things we need to be sure of before we push the button, but I think it's likely that project will proceed on a phased basis next year. So I mean I think that gives an overview of all the kind of major things we're working on. Of course, it goes without saying that we're working on anything that is safety-critical, key maintenance. That's the absolute bread and butter of our jobs day in and day out. But -- and yes, I don't recognize that kind of feeling that we don't -- we're not accountable and we don't deliver on our stated time lines. And hopefully, that goes some weight to answering that point. Next question, what are your plans for production over time? You mentioned [ 35 Kboed ] barrels in Asia by 2030. What about the U.K.? Assuming no transformation comes, where do you see total company production by 2030? And what are the time lines to get to whatever that total is? So I think we've been very clear and hopefully I've been clear on this call as well that we are targeting significant production growth in the U.K. via acquisition, and that remains primary amongst our strategic priorities. With the existing portfolio, our focus on continuing to deliver sector-leading production efficiencies. And where possible, we'd look to optimize asset output through investment. Again, we're talking here about EOR. There's some opportunity for further drilling at Magnus. We're talking about Bressay Gas here. All of these projects can boost production reserves with a long-term aim being to offset natural field declines. I mean remember, with late-life assets, the success is being able to maintain stable production. What I should also point out as well is that were the fiscal and regulatory landscape to change meaningfully, whether that's in November, whether it's next year or whether it's the year after, then we do have Bressay and Brently as opportunities waiting in the wings. We're progressing the Bressay Gas tieback as I've referenced a couple of times. But the phased oil development is not something that we will progress while EPL is being implemented. While the EPL is in place, it doesn't really work to take on a big project like that, but we're still doing the work in the background. We still believe we have development concepts and if the fiscal and regulatory environment in the U.K. is conducive to it, then that's something we would certainly look to progress. The final submitted question. Again, it kind of aggregates a couple of questions is, what was the reason behind not activating buybacks for -- so it's a bit of a typo here -- but for a smaller amount, considering the low share value versus intrinsic value? So I mean what I would say there is we set out on a journey 3 years ago to deliver shareholder returns. And we were very clear with shareholders. But up until that point, we hadn't done any shareholder distributions, but having put more than $1.5 billion into our balance sheet to reduce the net debt, we were cognizant that was the time to start returning funds to our shareholders have been very loyal to us over that period. So we embarked on our first shareholder distribution in June 2024. This year, the Board took the decision they wanted to give more certainty to the award. And thus switch from a buyback to a dividend. And of course, that was paid in June. So we've always been clear that when we initiated returns, we want them to be sustainable. And I think I laid out earlier, that remains a key priority for our capital allocation thinking. So we haven't made the decision to take on another distribution during this year. I'd expect the net shareholder return to be aligned to our 2025 full year results. So that is the pre-submitted. I'm going to go through some of the live questions now. Bear with me just a second, I'm trying to cover -- find some that I haven't covered already. There's a request here to provide a slide to show average annual production for the last 10 years. Can you arrange for this to be included in future presentations? Yes, I'm very happy to add that. Going forward, I'll add a sort of asset view and a company-wide view. That's not a problem. Are you still profitable and able to pay down debt in a low oil price environment as at present? So yes, I mean, that's a question from Jason. So yes, Jason, I mean, I think I've taken -- certainly tried to answer that. I think we're still in a position where we're robust financially. We're still -- we've generated cash in the first half of the year. Yes, we've had some additional outgoings in early 2 weeks, we've paid our tax bill. And we've paid the balance on the Vietnam acquisition. So that was obviously a cash outflow in the month of July. But we're working very hard to make sure that we make further inroads into net debt for the remainder of the year. And the production that we're seeing at Magnus, the production we're seeing across the portfolio suggests that we'll do that. So I think actually, even at low prices were robust. We're also an operator of 96% of our reserves and volumes. So that gives us optionality, right? Were we to see a prolonged period of soft oil prices, then we can take steps, and we have the operational control with which to take steps to reduce our costs. Now of course, as I mentioned earlier, there's a balance there, and we don't want to tip the scales into seeing production outages by doing that, but we want to make sure we have a balanced approach to investing in our assets. Let's have a look here. I mean, I think it's fair to say that there's a number of questions and some of them statements around where the equity value is and share value. And of course, you as shareholders are upset about that, and I can completely understand I'm an EnQuest shareholder myself. And I think that what we've got to understand here is that we're operating in a sector that has taken a bit of a bashing in the U.K., we're under -- operating under very difficult fiscal conditions. And we have a stated desire to stay in this jurisdiction. One thing we haven't really talked about is our tax asset. It's been a feature of a number of the presentations we've done in recent times. So Hopefully, people on the call are aware that EnQuest sits on a U.K. tax asset, a recognized tax asset $2 billion, and there's a further $1.2 billion that's waiting in the wings to become recognized starting in 2026. So that's a huge amount of value for us to protect against tax, and what we're looking to do is accelerate the value of those tax assets as we look to transact in the U.K. So we are very clear that what this business needs. I mean we've got the capability. We've got the skills. We've got the people. We've got the balance sheet. We've got the other assets, as in, the tax assets. But what we are lacking is scale. We need to do transactions in the U.K., which increased scale in the business, accelerate the value of the tax asset and the cash that that throws off will be used to diversify the business further to return funds to shareholders and also to make sure that we're investing the right amount in our core portfolio. So look, Amjad is the -- who's our CEO, is the largest shareholder in the business. He is hugely motivated across every facet of his connection with EnQuest to get this right, and we're working very, very hard to do so. So look, we appreciate. There are some -- there's some disappointment around at the moment in terms of where we are with an equity value, but we think the future is bright, and we do think we will see a rebasing of our value as we transform the business through acquisition. There's a question here from Marcus around how production uptime influences the availability of 2P reserves. So that's a really interesting question, right? And we are audited every year by Gaffney Cline. They do an audit of our reserves. And it factors in, Marcus, is we have to present a case and a scenario to those auditors around what we can reasonably expect to extract from each asset. And if we were running production efficiencies of 60%, then they absolutely would not support our view of how these assets are performing. So the fact that we deliver year-on-year in terms of production uptime definitely helps the recognition of our reserves, and it also helps present a case that we, as an operator, are best placed to optimize and maximize the outlook from our assets. So that's a really good question. Thank you for that. Question, Paul, was the 2025 final dividend -- 2024 final dividend paid in '25. Was it a one-off? Or do you envisage that? This will be repeated. And we've been very clear from the start, Paul, that we see sustainable sort of capital allocation towards shareholder returns as being sustainable, something we want to do year-on-year. And as I mentioned in my answer to the last question, of the pre-submitted question, I would expect to see that addressed alongside our 2025 full year results. There's a couple of questions here around specific M&A transactions where there's people questioning specific purchases that we might be able to make. And I hope you'll understand I can't go into those in this forum. I think what I would say, though, is we are knowledgeable buyers in the North Sea. As you would expect, we're looking at everything. We are not only waiting for things to become available, but we are the creators and we are the instigators of certain conversations, many of which are bilateral. So look, I think we are -- we are very -- we're covering a wide range of options. I've talked about we're looking at asset packages. We're looking at corporate transactions. So we're looking at everything. The team are busy. Amjad and his executive team are extremely busy. We've got BD colleagues who are running full tilt across a number of options. So at the moment, we accept it's a trust me exercise until we actually do the deal. But yes, we're looking at everything. And see, there's a question here from Jonathan. I think it's possibly Jonathan Allen, who's someone contacts me a lot and then I speak to you a lot and he's a long-standing shareholder. And I think the question from Jonathon is, do you think the autumn budget -- will be the catalyst for potential M&A to actually happen. So I think there's definitely the potential for that, Jonathan. I think if you go back a year from where we are today to 2024, we were approaching an autumn statement with open-ended downside risk. We knew it wasn't going to be a good budget for our sector. We just didn't know how bad it was going to be. As you remember at that time, I updated that EnQuest were directly involved. We had a lot of conversations with treasury, with James Murray, other areas of government and as did our peers and our industry bodies, and we averted the worst-case scenario by stopping the government taking away first year capital allowances. So a year on from that, we're in that same count down to the autumn statement, but it feels more cautiously optimistic. It feels like there are upside potential outcomes. We just don't know how far the government is willing to go. Now the autumn statement 2024 did fire the starting gun for a couple of deals. So Shell and Equinor, for example, was executed extremely quickly once the certainty of the autumn budget was released, and then you saw some other follow-on transactions like Repsol, NEO to create NEO NEXT, et cetera. So I think there's definitely the potential, Jonathan, that the clarity brought about by the autumn statement or the North Sea strategy, whichever comes first, definitely has the potential to crystallize discussions very quickly. Can you explain how the bond market has changed, so we are not going to be under pressure to refinance next year, please? That's a question from Sam. Yes, thanks, Sam. I think that's a really timely question. So obviously, we are in a nice position at the moment where our -- we don't have any maturities until second half of 2027. But you would all think as negligent if Amjad and Jon, obviously, Jonathan, as CFO, leading it, but you would be surprised if we weren't looking at our options going forward. I think the interesting thing about the bond market and actually even the RBL market is that if I've been talking to you 3 to 5 years ago, I would have been talking about the huge pressure being applied to that and the availability of those kind of funds because of banks, in particular, institutions leaving the space and no longer being willing to lend into oil and gas. Now fast forward to 2025, that is simply not the case. We have we personally, as EnQuest, have really strong support among our lending syndicate. There are other, I guess, you could call them disruptors, new institutions coming into the space, and they're writing quite large tickets and forcing everyone else to follow suit. We saw that 10 years ago with the likes of DNB coming into the space. And we're seeing that again with some other new institutions. So the conversations we're having are very positive. We're looking to optimize our own view of what our capital stack looks like, how much of it is flexible, i.e., RBL, how much of it is bonds and what the makeup of that is. So we believe we've got options there. We're not concerned about that. And actually, we see really strong indications in the market. Ithaca recently did a refinancing and upsizing and that went very well, they were able to lock in some good rates. So the market is very much open for business and very much open for business for EnQuest. Thank you for that, Sam. I'm just going to have one other go through. There's a number of questions here around free cash flow, I've talked a little bit about we can't give specific breakeven guidance because it could be construed to the profit forecast. But hopefully, in this call, I've given you component elements to help you form your own view, and I'm very happy to discuss if anyone wants to run past me then that's absolutely fine. There's another question here from Patrick around the refinancing of the bonds. Hopefully, I've just covered that. We've talked about M&A, future drilling at Kraken, that's a question from John. Can you bring us up to date on future Kraken drilling? So I think we said at the half year results, and I think the key to think about with Kraken is it's kind of a two-sided coin, right? We've got EOR, which is organic, obviously, and that's an OpEx project, if you like, as opposed to a capital project, and then we've got the drilling opportunities that still exist at the field. And I think the reality is we'll look to do a combination of both. We're still in a situation whereby we're working well with our partner whose parent remains in administration. They're having their own issues and resolving that situation. But from an operational standpoint, there's no issue that we're working well with them. They continue to be partners and good standing. So I think we haven't made a firm decision on the date of Kraken drilling, but absolutely, there's drilling in the future of Kraken. There's a question from Christopher here on whether we would consider a dual listing or secondary market listings in Asia given the company's growing exposure and recognition in Southeast Asia. I think that's a good point, Christopher, I think at the moment, that's probably a little bit premature. But I think what you are doing there is you're kind of recognizing the fact that moving from a company albeit with a very good reputation, but producing at the moment like 8,000 barrels a day to [ 35,000 ] in a few years' time, absolutely is increasing our visibility in the country and in the region. And I think that's to our to the positive of the group as a whole. And we're looking to build on that amendment grow our footprint and our exposure in Southeast Asia further. I'm just looking at some -- I want to make sure I capture pretty much everything. I think there is -- I think I've covered pretty much everything in one way or other, apologies if I haven't answered your specific question, of course, as part of the investor meets platform, I have the opportunity to revisit every question in detail and make sure that everyone gets answered. As I said, there are a couple of questions, which are a little bit repeating what I've already covered. So I think at that point, Jake, I'll probably close the Q&A here with a commitment to revisit any questions I haven't managed to cover in this time.

Perfect. Craig. And thank you very much indeed for being so generous of your time and addressing all of those questions that came in from investors this afternoon. And of course, if there are any further questions, we'll make these available to you as well. But, Craig, perhaps before really now just looking to redirect those on the call to provide you their feedback, which I know is particularly important to yourself and the company. But please just ask you for a few closing comments just to wrap up with, that would be great.

Yes. Well, I thank everyone for taking the time to join this presentation today. Hopefully, what you've heard today has been clear and a good representation of where EnQuest is and I understand we're in a difficult position in terms of equity value at the moment, we're certainly trading at a discount, and we want to rectify that. So I'd ask you to be patient and trust in the team as I do, the Amjad and the execs and the Board will do the deal that's right for EnQuest. We're going to maintain discipline. It's stood us in good stead as we navigated a very difficult debt position. We're going to maintain that plan, then we're going to do a deal or deals that are very value accretive for you shareholders. So thank you for your attention today.

Perfect, Craig. That's great. Thank you once again for updating investors this afternoon. Could I please ask investors not to close this session will now be automatically redirected for the opportunity to provide your feedback in order of the management team can really better understand your views and expectations. This is going to take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of EnQuest PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.