UK INDEPENDENT EnQuest has slashed its capex by 40 per cent and announced an agreement with lenders to relax credit facility terms in response to the depressed oil price.

Its expenditure for 2015 will fall to $600 million, with the company saying the decrease will help operating cost per barrel to be reduced by at least 10%.

The company said it would find further savings in the supply chain and through the use of contractors.

The company’s lending banks have agreed to raise the net debt/EBITDA covenant on the credit facility to five times and the ratio of financial charges to EBITDA to three times, both until mid-2017.

“The lenders’ continued commitment recognises the considerable cash flow generating potential of EnQuest’s business, in particular from the Alma/Galia and the Kraken developments coming on stream in the next two years,” the company said in a statement.

EnQuest chief executive Amjad Bseisu said the price decline had affected all in the industry, not least EnQuest, but good production growth meant the company would remain strong.

“I am very pleased that our production efficiency for 2014 has been approximately 90%, which is an exceptional performance and ranks EnQuest as one of the best operators in the North Sea,” Mr Bseisu said.

The company said its financial position “remains resilient”, with net debt to be about $1 billion by year’s end.