Enterprise profits fall

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The Independent Online
ENTERPRISE OIL, the big North Sea explorer, has lifted its total dividend by 2 per cent to 16p for last year despite a sharp fall in profits caused by lower oil prices and a high tax bill.

The payout is the sixth consecutive increase on net profits down to pounds 87m from pounds 110.5m and group turnover up from pounds 488m to pounds 538m.

Enterprise said the improved payout reflected confidence in the company's future. Although economic conditions were expected to remain uncertain, the group's oil production will rise sharply thanks to the development of two new North Sea oilfields, Nelson and Scott.

They come on stream next year and should boost the company's output from about 145,000 to 250,000 barrels per day.

Last year's production volumes were also up, rising 11 per cent over 1991 as four new projects came into operation. In addition, volume at existing British and Norwegian fields remained at high levels.

The results included a pounds 37m gain on the sales of peripheral assets to a Japanese energy company.

However, interest charges up from pounds 46m to pounds 58m and a soaring tax bill - up from just pounds 4m to pounds 58m - depressed the bottom line.

A sharply reduced drilling programme led to a fall in exploration expenditure from pounds 116m to pounds 74m. Enterprise drilled just 27 wells last year, 22 less than in 1991.

Although the company raised dollars 435m in an American depositary receipt issue, net borrowings rose from pounds 332m to pounds 407m - amounting to 45 per cent of shareholders' funds.

Earnings per share slipped from 24.5p to 18.5p.