EnQuest's 2017 core profit falls but beats expectations
* 2017 core profit below 2016 due to hedging
* For 2018, hedges 7.5 mln barrels at about $62/bbl
* Sale process of 20 pct Kraken stake ongoing -CEO
* Kraken avg output in January, February 38,000 boe/d
* Shares (Berlin: DI6.BE - news) up 5.5 pct (Adds comments from CEO, hedging details)
By Shadia Nasralla
LONDON, March 20 (Reuters) - Oil and gas group EnQuest reported a 36.4 percent fall in annual core profit of $303.6 million on Tuesday but beat analysts' forecasts, as it embarks on reducing debt of around $2 billion helped by the ramp-up of its Kraken oilfield.
The North Sea-focused company said it expected to raise production to 50,000 to 58,000 barrels of oil equivalent per day (boe/d) this year from just under 38,000 boe/d last year. Kraken's output averaged 38,000 boe/d in January and February.
EnQuest (Frankfurt: 3EQ.F - news) shares were up 5.5 percent at 32.85 pounds at 0918 GMT versus the STOXX Europe 600 Oil & Gas index which was down 0.3 percent.
Kraken was shut down due to cold weather earlier this month, which means a planned shutdown for April will no longer take place. A planned shutdown for the third quarter will go ahead.
EnQuest has hired investment bank Jefferies to advise on a sale of a 20 percent stake in Kraken, according to a document seen by Reuters in January.
A previous attempt to sell a stake in the field did not pan out.
"If the offers are acceptable we will look at reducing our interest, if not we will keep our interest," Chief Executive Officer Amjad Bseisu told Reuters in a phone interview. "The process is ongoing... we haven't finalised any offers or discussions yet."
EnQuest's earnings before interest, tax, depreciation and amortisation topped the $296.26 million expected by analysts, according to the Reuters estimates.
But that was down from $477.1 million in 2016 on revenue down by around a quarter to $635.2 million.
"The commodity hedge programme resulted in realised losses of $20.6 million in 2017 compared to realised gains of $255.8 million in 2016," the company said, noting its blended average realised oil price fell to $52.20 from $63.80 per barrel.
Excluding this hedging impact, it said the average realised oil price rose 21.8 percent to $53.90 per barrel reflecting higher market prices.
This year, the group hedged 7.5 million barrels of oil at an average price of around $62 per barrel. (Additional reporting by Ron Bousso; editing by Louise Heavens and Jason Neely)