13th Apr 2016 07:03
LONDON (Alliance News) - Premier Oil PLC Wednesday gave shareholders the long-awaited good news that the company's major Solan field in the UK North Sea has produced its first oil, but said the field will achieve its initial production rate later than expected as it announced one more delay to the project.
Premier Oil shares were up 4.2% to 55.50 pence per share Wednesday morning.
Solan is expected to be the major driver of production growth in 2016, alongside the company's recently acquired assets in the North Sea from E.ON. The Solan field is expected to be producing around 20,000 to 25,000 barrels of oil per day in the second half of this year.
Unfortunately, the already-late project looks like it has been hit by another delay as Premier Oil had previously advised it would achieve that production rate by the end of the first half of the year.
Still, the field will assist Premier Oil in growing production to the region of 65,000 to 70,000 barrels a day from the 57,600 barrels a day in 2015.
Premier Oil said the P-1 well is the first one to have started producing, but said this is being deliberately restricted for a short time until the pump is turned on.
"Following this initial period and, taking advantage of the availability of the Superior Flotel, over which Premier has contractual options until the end of May, Premier intends to carry out a planned production shut down to complete the final commissioning of the water injection plant, the tie in of the second water injection well, W-2, and preparation for the tie in of the second producer well, P-2," said the company.
The Ocean Valiant rig is currently drilling the second producing P-2 well, where it has intersected 1,500 feet of high quality reservoir sands. That well should be tied-in by "mid-year".
"Production from the field is expected to build up to an anticipated production rate of 20,000 to 25,000 barrels of oil equivalent per day in the second half of 2016 when both pairs of producer-injector wells will be on stream," said Premier Oil.
By Joshua Warner; [email protected]; @JoshAlliance
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