20th Aug 2015 06:38
LONDON (Alliance News) - Premier Oil PLC Thursday said it swung to a substantial pretax loss in the first half of 2015 on the back of impairment charges, a drop in production and lower oil prices.
The FTSE 250-listed company swung to a USD214.7 million pretax loss in the first half of 2015 from a USD50.4 million profit a year earlier as revenue dropped to USD577.0 million from USD884.7 million. Although revenue was only just under analyst expectations, the loss is significantly wider than the USD95.0 million expected, according to a consensus.
Alongside the fall in revenue caused by a fall in production and lower oil prices, the loss was caused by the USD385.3 million impairment booked against its assets compared to only USD144.0 million a year earlier, as well as higher exploration costs of USD45.3 million from USD37.4 million.
Operating cashflow in the half was USD513.0 million, rising from USD499.4 million a year earlier, which was significantly higher than the USD469.0 million expected by analysts.
Production in the period averaged 60,400 barrels of oil equivalent per day, just over expectations but lower than the 64,900 barrels per day a year earlier. Full year guidance remains unchanged at 55,000 barrels per day, it said.
Prices averaged only USD57.8 per barrel in the first half compared to USD108.9 per barrel a year earlier. However, the company does have a substantial hedging programme in place. Gas prices also fell to USD12.3 per thousand standard cubic feet from USD16.9 a year earlier.
The Solan field, eargerly watched by shareholders, is still on track to begin producing in the fourth quarter of 2015 and it also said it is progressing with asset disposals. Premier has started discussions about selling its Pakistan business which should "be concluded by year-end", it said.
The capital expenditure budget for the year remains unchanged at USD900.0 million for development and USD240.0 million for exploration. In 2016, total capital expenditure will drop to around USD500.0 million.
Net debt at the end of the half stood at USD2.09 billion, falling from USD2.12 billion at the end of December. That net debt figure is spot on analyst estimates.
By Joshua Warner; [email protected]; @JoshAlliance
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