15th Jul 2020 09:36
(Alliance News) - Premier Oil PLC on Wednesday said its average production for the first half of 2020 was 67,300 barrels of oil equivalent per day, allowing the company to retain its annual guidance.
The FTSE 250 upstream oil and gas company said Solan P3 was successfully drilled and should be on-stream in September. It is forecast to add 10,000 barrels of oil per day.
This has allowed the company to keep its annual production guidance of 65,000 to 70,000 boepd.
Premier Oil forecasts a 2020 capital expenditure of USD340 million, an operating expenditure of USD12 per barrel of oil equivalent and lease costs of USD6 per boe, reflecting USD240 million of savings and deferrals.
The BP acquisitions approved by creditors is expected to add 17,000 barrels per day from targeted completion date of September 30.
The company is holding discussions with its creditors regarding the long term extension of the group's credit maturities with the aim of agreeing on terms which can be recommended to the full lender group by the end of July.
Premier Oil net debt was reduced to USD1.97 billion and the company forecasts a positive free cash flow for the full year this year given the current forward curve.
Chief Executive Tony Durrant said: "The continued underlying performance of our core assets along with the decisive action we have taken to reduce our expenditure during the first half has resulted in our net debt remaining broadly flat despite significantly weaker commodity prices during the period.
"This, together with the expected agreement on the amendments to our credit facilities and the completion of the value-accretive BP acquisitions, positions us well to benefit from a recovering oil price."
Premier Oil shares were down 3.0% at 43.97 pence each on Wednesday morning in London.
By Greg Roxburgh; [email protected]
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