* Restructuring deal gives EnQuest $410 mln liquidity boost
* Links cash bond interest payments to oil at $65 a barrel
* Kraken costs down by another $100 mln to $2.5 bln
* Expects $60 mln-$80 mln windfall from current pound level
By Karolin Schaps
LONDON, Oct 13 The chief executive of EnQuest
has pledged to buy up to $50 million worth of new shares
in the North Sea oil producer, a move that clinched a broader
restructuring deal for the company struggling with mounting
EnQuest, which had $1.7 billion in debt at the end of June,
said the deal announced on Thursday would bring in $410 million
of extra cash mainly to be used at its Kraken oil field, which
is due to come on stream in the first half of next year.
"This underwriting is showing my personal commitment to the
company. I'm putting my money where my mouth is," EnQuest
founder and CEO Amjad Bseisu told Reuters.
The company said it would issue 300 million new shares at 23
pence per share, a 17 percent discount to Wednesday's closing
price, and that lenders had agreed to relax some debt repayment
EnQuest agreed with bondholders to only pay bond interest in
cash when oil prices are above $65 a barrel for a six-month
period. Below $65, bond interest payments will be capitalised
Some of EnQuest's bond maturity terms and covenants were
Brent crude is trading at about $52 a barrel and has not
been above $65 since June 2015.
"The deal buys time and running room until Kraken is on
stream," FirstEnergy analyst Stephane Foucaud said.
Bseisu said the total costs for Kraken had fallen by another
$100 million to $2.5 billion thanks to more efficient drilling
EnQuest said it was also reaping further windfalls from the
decline in the pound following Britain's vote in June to leave
the European Union.
Chief Financial Officer Jonathan Swinney told Reuters the
company could see cost reductions of $60 million to $80 million
a year if the pound remains at its current level against the
EnQuest makes money in dollars, the currency used in the oil
market, but the majority of its costs are in sterling.
(Editing by David Clarke)