9th Jul 2015 06:58
LONDON (Alliance News) - Premier Oil PLC Thursday said production and revenue fell in the first half of the year as expected due to a combination of the fall in oil prices and the sale of some of its assets.
The FTSE 250 oil and gas producer said production in the first half of 2015 was 60,300 barrels of oil equivalent per day, down from 64,900 barrels per day a year earlier after the company sold some of its assets in the UK during 2014.
The company reiterated its full-year 2015 guidance of 55,000 barrels of oil equivalent per day, but this excludes any new production from the Solan field in the UK North Sea, which will come online in the fourth quarter of 2015.
Production in Vietnam was the only segment to see an increase in the first half to 19,600 barrels per day from 15,800 barrels, whilst Indonesian production fell to 13,100 barrels per day from 14,000 barrels and production from Pakistan and Mauritania fell to 10,800 barrels from 13,800 barrels.
UK production saw the biggest fall in the period to 16,800 barrels per day from 21,300 barrels, after Premier sold the Scott area in 2014 and the Huntingdon field produced less due to constraints on the gas export route during the first quarter, it said.
Overall, Premier said Vietnam was performing ahead of expectations whilst the UK was under-performing, but said the production fall from its other assets was in line with expectations.
Revenue for the first half fell to USD580 million from USD885 million as average oil prices dropped to USD83.7 per barrel from USD110.2 per barrel a year earlier. However, the company also has a hedging programme of 5.6 million barrels at a forward price of USD97.6 per barrel in 2015.
Operating costs fell by around 30% to USD150 million in the first half from USD216.9 million, equating to around USD14 per barrel across the group. That was mainly achieved by the disposal of the Scott area and "significant savings" from ongoing operations. General and administrative costs also fell to USD115 million from USD140 million.
Premier said its capital expenditure forecast for 2015 remains unchanged, but that excludes expenditure that would have been paid by its partner, Chrysaor, on the Solan field. Now that Premier has fully acquired the Solan field from Chrysaor, full-year capital expenditure will be around USD900 million compared to the previous guidance of USD750 million.
Planned exploration expenditure also has risen to USD240 million from the previous guidance of USD220 million due to extra spending on the Isobel deep well offshore the Falkland Islands in its joint venture with Rockhopper Exploration PLC and Falkland Oil and Gas PLC.
Net debt remained flat in the first half at USD2.10 billion.
By Joshua Warner; [email protected]; @JoshAlliance
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