British North Sea-focused oil producer EnQuest reported a loss after tax for the first half of this year on Tuesday, hit by Britain's windfall tax, sending its shares 13% lower.
The company also reaffirmed its full-year production to be within its previous forecast range of 42,000 to 46,000 barrels of oil equivalent per day (boepd).
"The UK's oil and gas sector faces significant challenges and loss of competitiveness due to uncertainty following the adverse changes to the fiscal regime," CEO Amjad Bseisu said in a statement.
Analysts at Jefferies said in a note the unchanged forecast is arguably the "highlight of unremarkable results" as the first half net loss and net debt both missed Jefferies' expectations.
The company, which had net debt of about $592 million as of June-end compared with a market value of about $414.9 million, reported a nearly 58% drop in half-year free cash flow to $140 million as it further repaid its debts.
The company with operations in Britain and Malaysia reported a loss after tax of $21.2 million for the six months ended June 30, compared with a profit of $203.5 million a year earlier.
The energy profit levy (EPL) was introduced in May last year after a jump in energy prices resulting from Russia's invasion of Ukraine, but the industry has warned that the high tax level could lead to reduced output in the long term.
The EPL was raised from its initial 25% rate to 35% in November, bringing the overall tax burden to 75%.
EnQuest booked a $76 million current tax charge in the six months to June 30, associated with the EPL.
Shares of the company fell about 15% to an over two-month low of 14.82 pence.
(Reporting by Richard Rohan Francis in Bengaluru; Editing by Rashmi Aich and Angus MacSwan)