12th Jul 2016 06:50
LONDON (Alliance News) - Oil and gas explorer Premier Oil PLC on Tuesday said it anticipates production in 2016 will be at the upper end of its previous guidance and said operating expenditure in the first half came in below budget.
Premier Oil said production in the six months to the end of June was 61,000 barrels of oil equivalent per day, with recent rates hitting around 80,000 boepd. For 2016 as a whole, the group anticipates production will come in at the upper end of its guidance of 65,000 to 70,000 boepd.
Premier said the Solan field in the North Sea is ramping up from the P1 well and said the P2 well has been completed and successfully tested, meaning it will be tied into production from the field imminently. The Catcher project, also in the North Sea, is on schedule and further cost reductions have been secured, Premier said.
The company added operating expenditure in the first half was around USD16.00 per barrel of oil equivalent, 14% below budget. In addition, the weakening of sterling since the UK's Brexit vote should reduce the cost of capital and operating expenditure and debt denominated in pounds.
Premier said negotiations with its lenders have progressed well, after it secured a deferral to its main covenant test on its loan facilities at the start of July.
"We now look forward to a rising production profile and, with Solan on-stream, significantly lower committed capital expenditure. At current oil prices, we start to generate free cash flow later this year which positions us well to manage the balance sheet whilst retaining some optionality for future growth projects," said Tony Durrant, Premier's chief executive.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
PMO.L