Evidence continues to mount of the damage being done to the North Sea oil and gas industry by the UK chancellor's controversial windfall tax on producers.
The continued flow of negative news from the sector puts even more pressure on Jeremy Hunt to lessen the severity of the energy profits levy (EPL) in his Budget on Wednesday, March 15.
The latest hit to the health of the North Sea industry was revealed by EnQuest in an operations update.
Chief executive Amjad Bseisu said EPL will impact cash-flow generation and have implications for capital allocation strategy and UK production-growth ambitions.
The business said it has further optimised its capital programme for 2023, whereby Kraken drilling will be deferred.
Deferring Kraken spend
The company went on: "The impact of the EPL on cash available for investment has resulted in the group prioritising quick-payback opportunities at Magnus and deferring spend on Kraken drilling."
In the last year, average EnQuest production was 47,259 barrels of oil equivalent per day (boepd) - 6% higher than 2021.
Kraken average gross production was 26,091 boepd, while Magnus production was 12,641.
Kraken is a heavy oil producing asset and is the largest asset in EnQuest's portfolio.
First oil was delivered in June 2017 and Kraken is expected to have a life of over 20 years.
Operators being hit
Other UK operators have already reported on how the levy is hitting them.
Harbour Energy, the North Sea's largest oil and gas producer, said last month it was preparing to cut hundreds of jobs and shift attention outside of the UK in response to the windfall tax.
The company has launched a review of its UK business "to align with lower future activity levels" after the tax rate on operators was increased from 40% to 75% following months of soaring gas and oil prices.
The firm also confirmed that it had not taken part in the UK Government's 33rd offshore licensing round.
Meanwhile, French oil and gas giant TotalEnergies has said it will cut North Sea investment by £100million, or 25%. this year owing to the tax.
The UK Government's enormous tax grab on the energy industry was widely criticised when it was confirmed at the end of last year.
75% tax rate
The chancellor hiked the EPL on North Sea oil and gas producers by another 10% to 35% - bringing the overall tax rate to an eye-watering 75%.
He also extended the lifespan of the EPL until March 2028 from the previous date at the end of 2025.
The larger EPL was expected to raise a total of £40billion - double the previous figure of £20billion - but falling oil and gas prices have put the eventual size of this tax take in doubt.
Mr Hunt has been accused of treating the North Sea as a cash cow, and has also been warned that his move will threaten tens of billions of pounds of investment in the basin.
Aberdeen now has the unwelcome title of the tax capital of Europe.
Very worrying for the Granite City is that oil and gas producers are now looking at all possible ways to save on costs after the chancellor's levy - and that is not good news for the north-east economy in the years ahead.