EnQuest's Petronas Malaysia Deal Set to More Than Double Production

Key Points

• EnQuest plans to acquire four Malaysian assets from Petronas Carigali in a deal executives call “transformational,” with production expected to rise above 100,000 barrels of oil equivalent per day and more than double the company’s scale.
• The transaction carries a maximum price of $833 million and would lift the enlarged group’s 2025 EBITDA to more than $900 million, while also reducing combined operating costs by about 35%.
• The deal shifts EnQuest’s portfolio toward Southeast Asia, with the region expected to account for nearly 70% of production; completion is targeted for Dec. 31, 2026, pending shareholder approval and resolution of preemption rights.

EnQuest LON: ENQ executives said a proposed acquisition of participating interests in four Malaysian fields from Petronas Carigali would more than double the company’s scale and shift the center of its portfolio toward Southeast Asia.

Chief Executive Amjad Bseisu described the transaction as a “seminal moment” and a “transformational deal” for EnQuest, saying it would lift group production above 100,000 barrels of oil equivalent per day and provide a more diversified, lower-cost asset base. The company said the acquired assets are producing, low-capex fields in Malaysia, a region where EnQuest has operated for 12 years.

“We think we can create a lot of value for shareholders in this transaction,” Bseisu said during the investor presentation. He added that EnQuest had been selected as the preferred party in December after a bid process that began in the second half of last year, with six months spent negotiating agreements related to the transfer of operations.

Deal Terms and Financial Impact

Chief Financial Officer Jonathan Copus said the maximum consideration for the deal is $833 million, comprising an upfront payment of $554 million, deferred consideration of $189 million and contingent consideration of $90 million. The deferred amount is payable in three equal installments, with the first payment due on the anniversary of completion. The contingent consideration is tied to final investment decisions on three projects.

Copus said the transaction implies upfront consideration of about $4 per barrel of oil equivalent and firm consideration of a little over $5 per barrel of oil equivalent.

Based on 2025 figures, EnQuest said the enlarged group would generate revenue of about $1.8 billion and EBITDA in excess of $900 million, up from about $500 million. Copus said the acquired assets contributed more than $400 million of EBITDA in 2025, which he described as a proxy for pre-tax operating cash flow. On a post-tax, pre-capex basis, he said the assets have historically generated $200 million to $300 million of cash flow.

The company said the acquired assets have operating costs of about $10 per barrel and limited forward capital needs. Copus said EnQuest’s share of capital expenditure from 2027 through the end of the assets’ lives would be about $170 million to deliver the 2P profiles. The transaction is expected to reduce combined group operating costs by 35% to about $16 per barrel of oil equivalent.

Production, Reserves and Portfolio Mix

EnQuest executives said the transaction would raise production to more than 100,000 barrels of oil equivalent per day, with that level expected to be maintained through the end of the decade. Copus said that represents a 134% uplift in production based on 2025 numbers.

Radzif Ahmed, EnQuest’s General Manager for South East Asia, said the deal adds 138 million barrels of 2P reserves, 208 million barrels of 2C resources and up to 100 million barrels of additional upside potential. He said EnQuest sees opportunities to convert contingent resources into 2P reserves over coming years.

The transaction also changes EnQuest’s geographic and commodity mix. Ahmed said Southeast Asia would account for almost 70% of production, with the North Sea representing about 30%. Copus said the enlarged company would be 63% liquids, while Ahmed said gas would represent 37% of production.

Bseisu emphasized that EnQuest would retain significant operational control, saying 96% of the new reserves would be operated by the company. He said that control would allow EnQuest to apply its mature-field operating model across the new assets.

Malaysia Asset Packages

Bseisu outlined three asset packages included in the transaction:

• Package one: A 90% interest with net production of 33,700 barrels per day and about 200 million barrels of 2P reserves through the PSC expiration in December 2036. Bseisu said Balingian is the largest asset in the deal and has no preemption right.
• SK8 PSC: Also included in package one, with EnQuest acquiring a 100% operated interest. Bseisu said it adds 11,300 barrels per day of working-interest production and 15 million barrels of reserves, with PSC expiry in 2039.
• Package two: A 50% operated interest with net production of 7,000 barrels per day and about 18 million barrels of reserves. Bseisu said this package is subject to preemption rights and would require Petronas approval for any new operator.
• Package three: Non-operated assets in Peninsular Malaysia, contributing 5,400 barrels per day and about 5 million barrels of reserves.

Ahmed said the Balingian field has a recovery factor of about 19%, noting that even a small increase in recovery could materially raise recoveries because oil in place is about 2 billion barrels.

Funding, Timeline and Balance Sheet

Copus said EnQuest plans to fund the upfront payment using existing capacity under its reserve-based lending facility, including the exercise of $300 million of a $400 million accordion. The company is increasing the loan tranche of the RBL from $400 million to $700 million.

Using 2025 figures, Copus said EnQuest’s standalone net debt was $434 million, and the upfront consideration would take combined net debt to $988 million. With EBITDA above $900 million, the enlarged group’s net debt-to-EBITDA ratio would be about 1.1 times, compared with 0.9 times for EnQuest on a standalone basis. He said that remains at the lower end of the 1.0 to 1.5 times range the company has previously discussed for transactions.

The transaction is classified as a reverse takeover because of its size. Copus said EnQuest has signed three farm-out agreements and will publish a shareholder prospectus and circular after the preemption process for package two is resolved. A shareholder vote is expected in August, with completion scheduled for Dec. 31, 2026. He said EnQuest shares would be canceled and delisted at completion and then expected to be readmitted in early January 2027.

Growth Outlook and Shareholder Returns

During the Q&A session, Bseisu said the Malaysian deal does not preclude further North Sea acquisitions. He said the transaction strengthens EnQuest’s balance sheet and resilience, giving the company more flexibility to evaluate opportunities in the U.K. and elsewhere.

Bseisu also said EnQuest remains committed to shareholder returns. “As we grow, that will continue to grow with our continuing growth,” he said, adding that the transaction should make the company more robust and better positioned to increase shareholder value.

Ahmed said Malaysia’s production-sharing contract structure includes annual abandonment cess payments into decommissioning funds managed with Petronas. He said existing funds contributed by Petronas Carigali would be available for future decommissioning work, with EnQuest continuing to contribute after farming into the PSCs.

Bseisu said EnQuest’s immediate focus will be on completing the transaction and preparing to take over operations during the next six months. “This is not growth for growth’s sake,” he said. “It is disciplined expansion built on mature, high-quality assets where EnQuest operating model and differentiated capability can unlock significant additional value.”

About EnQuest LON: ENQ

EnQuest is providing creative solutions through the energy transition. EnQuest is an independent energy company. We focus on mature late-life assets, responsibly optimising production to provide energy security. Where we can, we repurpose our infrastructure to deliver renewable energy and decarbonisation projects before executing world-class decommissioning. Shares in the Company trade on the London Stock Exchange (ENQ.L).

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