Report on Payments to Govts

ENQUEST PLC, 7 JUNE 2018 

Reports on Payments to Governments for the Year ended 31 December 2017 

This report provides information in accordance with DTR 4.3A in respect of payments made by the Company to Governments for the year ended 31 December 2017 and in compliance with the Reports on Payments to Governments Regulations 2014 (SI 2014/3209). 

This report is available to download from: http://www.enquest.com/corporate-responsibility/business-conduct.aspx 

Basis of preparation 

The payments disclosed, which are on a cash basis, are based on where the obligation for the payment arose (i.e. at a project or corporate level). However, where a payment or a series of related payments do not exceed £86,000, they are disclosed at a corporate level, in accordance with the UK Regulations. 

All of the payments disclosed in accordance with the Directive have been made to national Governments, either directly or through a Ministry or Department of the national Government, with the exception of the Malaysian payments in respect of production entitlements, supplementary payments, royalties, research CESS and education commitment payments which are paid to PETRONAS (Petroliam Nasional Berhad, the National Oil Company of Malaysia). 

Production entitlements expressed in barrels 

This includes non-cash royalties and state non-participating interest paid in barrels of oil or gas out of EnQuest's working interest share of production in a licence. The figures disclosed are produced on an entitlement basis rather than a liftings basis. It does not include the Government's or NOC's working interest share of production in a licence. Production entitlements are assessed on a quarterly basis and have been multiplied by the relevant quarter's weighted average prices. 

Taxes 

This represents cash tax calculated on the basis of profits including income or capital gains. Income taxes are usually reflected in corporate income tax returns. The cash payment of income taxes occurs in the year in which the tax has arisen or up to one year later. Income taxes also include any cash tax rebates received from the Government or revenue authority during the year and excludes fines and penalties. Due to differences in the way cash movements were categorised and disclosed in the Group accounts, there is a c.$12,150 difference in the amounts disclosed above for Malaysian tax compared to the 2017 Annual Report. 

Royalties 

This represents cash royalties paid to Governments during the year for the extraction of oil or gas. The terms of the royalties are described within our Production Sharing Contracts (PSC) and can vary from project to project within one country. Royalties paid in kind have been recognised within the production entitlements category. The cash payments of royalties occurs in the year in which the tax has arisen. 

Licence fees 

This represents total, rather than working interest share of, licence fees, rental fees, entry fees and other levies or consideration for licences and/or concessions paid for access to an area during the year (with the exception of signature bonuses which are captured within bonus payments). 

Education commitment payment 

This represents the annual education contribution paid to PETRONAS pursuant to the Tanjong Baram Risk Service Contract. 

Research CESS 

Research CESS payments are contractual amounts due under the PM-8E Production Sharing Contract, and are based on EnQuest's entitlement to production. These payments are made to PETRONAS. 

Supplementary payments 

Supplementary payments are required under the PM-8E Production Sharing Contract and are based on EnQuest's entitlement to profit oil and profit gas. These payments are made to PETRONAS. 

Ends 

For further information please contact: 

EnQuest PLC                                                                                            Tel: +44 (0)20 7925 4900 
Amjad Bseisu (Chief Executive)  
Jonathan Swinney (Chief Financial Officer)  
Ian Wood (Communications & Investor Relations)
 

Tulchan Communications                                                                        Tel: +44 (0)20 7353 4200 
Martin Robinson       
Martin Pengelley 

Notes to editors 

ENQUEST 

EnQuest is one of the largest UK independent producers in the UK North Sea. EnQuest PLC trades on both the London Stock Exchange and the NASDAQ OMX Stockholm. Its operated assets include Thistle/Deveron, Heather/ Broom, the Dons area, Magnus, the Greater Kittiwake Area, Scolty/Crathes Alma/Galia and Kraken; EnQuest also has an interest in the non-operated Alba producing oil field. At the end of December 2017, EnQuest had interests in 25 UK production licences and was the operator of 23 of these licences.   

EnQuest believes that the UKCS represents a significant hydrocarbon basin, which continues to benefit from an extensive installed infrastructure base and skilled labour. EnQuest believes that its assets offer material organic growth opportunities, driven by exploitation of current infrastructure on the UKCS and the development of low risk near field opportunities.  

EnQuest is replicating its model in the UKCS by targeting previously underdeveloped assets in a small number of other maturing regions; complementing its operations and utilising its deep skills in the UK North Sea. In which context, EnQuest has interests in Malaysia where its operated assets include the PM8/Seligi Production Sharing Contract and the Tanjong Baram Risk Services Contract.  

Forward-looking statements: This announcement may contain certain forward-looking statements with respect to EnQuest's expectation and plans, strategy, management's objectives, future performance, production, reserves, costs, revenues and other trend information. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Nothing in this announcement should be construed as a profit forecast. Past share performance cannot be relied on as a guide to future performance. 

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