Premier Oil announces trading and operations update

Premier provides an update on recent operational activities and guidance in respect of its half year financials to 30 June 2018.


Production averaged 76.1 kboepd during 1H with recent run rates over 90 kboepd; full year guidance of 80-85 kboepd is unchanged
Catcher plateau production rates of 60 kbopd (gross) consistently achieved following commencement of gas export and water injectivity in May
Tolmount project Board approved; formal partner approval expected Q3
Zama discovery: pre-unitisation agreement notice submitted; appraisal programme to commence Q4
New, attractive exploration licences offshore Mexico and Indonesia signed; seismic work to start later this year
Sale of ETS (UK) and Kakap (Indonesia) completed; Babbage Area (UK) and Pakistan transactions awaiting government approvals
Forecast 2018 operating costs of $17-$18/boe; forecast development, exploration and abandonment expenditure of $380 million, in line with previous guidance
Net debt reduced to $2.65 billion over period; full year net debt reduction estimated at between $300 million and $400 million at current oil prices with covenant leverage ratio forecast to fall to 2.5x EBITDA by end Q1 2019

In his words, Tony Durrant, Chief Executive, said, “Catcher delivering stable plateau production is an important milestone for Premier. This, coupled with the ongoing strong performance from our underlying portfolio and our continued focus on cost control, will result in significant free cash flow generation and material debt reduction in the second half. We can also look forward to the formal sanction of our high value Tolmount project and the appraisal of our world class Zama discovery, both of which have the potential to deliver significant future growth.”

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