10th Jan 2019 08:21
LONDON (Alliance News) - New production from the North Sea Catcher field helped Premier Oil PLC achieve a rise in 2018 output, the company said on Thursday.
Premier's production was 80,500 barrels of oil equivalent per day in 2018, 7% higher than the year before and a record for the company.
In November and December, production averaged 92,000 barrels per day, with both months beating expectations.
Premier's production in the UK rose 18%, due to the ramp-up from Catcher, while performance at Vietnam's Chim Sao field beat expectations, averaging 15,200 barrels of oil equivalent per day in 2018 from 14,900 barrels in 2017.
In Indonesia, output fell year-on-year to 13,200 barrels of oil equivalent per day from 14,100 barrels while in Pakistan the figure dipped to 5,300 barrels from 6,500 barrels.
The drop in Indonesia, Premier said, was due to the sale of its interest in Kakap in April.
In 2019, Premier is guiding for production of around 75,000 barrels of oil equivalent per day on average, with a full year from Catcher coming in. On an underlying basis, that would represent an increase in output.
On the development front, Premier expects first gas in the fourth quarter of 2020 from Tolmount Main, while in Indonesia work at the Bison, Iguana, and Gajah-Puteri fields is on track for first gas in the last quarter of 2019.
Drilling is going well at Zama offshore Mexico, while Premier expects to spud the "high-value" Tolmount East appraisal well in the middle of 2019.
Financially, Premier is guiding for revenue of USD1.4 billion for 2018, up from USD1.1 billion in 2017, on the back of higher output and commodity prices. It has forward sold around 30% of forecast 2019 output at prices "significantly" above current ones.
Brent was quoted at USD60.77 per barrel on Thursday morning, down 26% in the past three months.
Premier's 2018 operating costs are guided to be below the lower end of its USD17 to USD18 per barrel guidance at USD16.9 per barrel. In 2019, this is expected to rise to USD20 per barrel approximately due to less output of low-cost gas and a natural decline in fixed-cost-base assets.
Net debt at the end of 2018 is guided to be around USD2.3 billion, down by USD390 million year-on-year, and below guidance of USD2.4 billion.
"Our strong operational performance and disciplined expenditure have enabled us to reduce our debt levels ahead of forecast," commented Chief Executive Tony Durrant.
"At the same time, we have continued to build our portfolio for the future, sanctioning our high value Tolmount Main gas project and capturing highly prospective new acreage in Mexico and Indonesia," Durrant continued.
"Looking to the year ahead, we have a strong production base which is well hedged and our priority remains to further reduce our debt levels while progressing our future growth projects to final investment decisions."
Premier Oil shares were up 4.3% at 79.40 pence early Thursday.
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