23rd Sep 2015 06:54
LONDON (Alliance News) - Premier Oil PLC Wednesday said production is currently running above its full-year guidance, as it continues to focus on lowering costs and using its substantial hedging programme to battle the downturn in oil prices.
The FTSE 250-listed oil and gas producer said production since the start of 2015 has averaged 57,100 barrels of oil equivalent per day after the company completed its summer maintenance activities.
The current production rate is above the company's full-year production guidance to average 55,000 barrels of oil equivalent per day, which excludes any production that may come from the Solan field in the UK North Sea, which is expected to begin producing later in 2015.
The Solan field is expected to begin producing in the fourth quarter, and the company said around 34,000 hours of planned commissioning activity remains before first oil. That compares to 54,000 hours at the end of the first half of 2015, as the company is completing between 600 to 800 hours of commissioning work on the field per day.
In terms of sales, Premier has hedged around 60% of its production in the second half of 2015 at USD92 per barrel and 30% of its production in 2016 at USD68 per barrel. Both those prices compare favourably to current Brent prices, which was trading at just under USD49 per barrel on Wednesday.
Premier's operating expenditure for the full year is expected to fall to around USD16.0 per barrel of oil as the company, like many of its peers, tries to bring down its costs and make savings to battle the downturn in oil prices since the middle of 2014.
Premier also reiterated its full-year capital expenditure budget of USD900.0 million for development and USD240.0 million for exploration. It reiterated capital expenditure will significantly reduce in 2016.
As of Wednesday, Premier Oil had USD1.30 billion of cash and undrawn facilities, allowing it to "enjoy significant liquidity".
"The company's long-term unsecured debt structure means that Premier is not subject to borrowing base redeterminations, and the company has no maturities on any of its debt instruments until end 2017," said the company.
Premier's major USD2.50 billion credit facility is not due for refinancing until the middle of 2019.
By Joshua Warner; [email protected]; @JoshAlliance
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