Enterprise Oil lifts profit to pounds 95m: Chairman says industry faces more uncertainty over prices

Click to follow
ENTERPRISE OIL predicted continued uncertainty in the oil business while announcing its annual results yesterday, despite boosting profits by pounds 7.7m to pounds 94.7m in 1993.

Graham Hearne, chairman, said it was ironic that Enterprise should report record levels of production at a time when oil prices were at their lowest in real terms in 20 years.

'This inevitably takes the edge off a year of solid progress. It means that, as in 1986 when we suffered another period of depressed oil prices, we have been shaping the business to meet the new circumstances - tight cash management, rigorous cost control, disciplined portfolio management and control of new investment to make sure that returns reflect a lower oil-price regime.'

He added that the price problems continued. 'The group is responding by reducing costs and restricting investment to projects which are robust in these conditions.'

The City was pleased by what analysts described as a good result. The shares rose 1p to 421p on the news that the dividend was maintained at 16p.

Average production was 158,000 barrels a day, a rise of 9 per cent. Reserves were strengthened by 60.3 million barrels - which was just over 100 per cent of 1993's production.

But the increased production levels are unlikely to be maintained, as new drilling has been cut back. Capital expenditure fell from pounds 450.4m in 1992 to pounds 329.4m last year.

Mr Hearne said the highlight of the year was the bringing on-stream of the Nelson field in the North Sea.

'With rising production and cash flows, Enterprise has significant strength to sustain its progress during this difficult period,' he added. 'Although trading conditions are far from clear, Enterprise is better placed than most in the industry to meet the challenge of low oil prices and take advantage of opportunities to maintain growth.'