18th Jan 2006 07:48
Premier Oil PLC18 January 2006 PREMIER OIL PLC ("Premier" or "the Company") Operational and Trading Update Premier today provides an operational and trading update ahead of its 2005 FinalResults which will be announced on 23rd March 2006. HIGHLIGHTS: Operations • Year end production ahead of expectations at 33.3 kboepd (Gas: 69%/ Oil: 31%) • Strong oil and gas prices realised in the second half. Development Programme • Mauritania - first oil from Chinguetti field is planned for March 2006 with Premier's share due to reach 5,700 boepd by year end. • Indonesia - West Lobe platform construction ahead of schedule and within budget (expected onstream 3Q 2006) • Pakistan - Zamzama Phase 2 contract successfully signed, discussions with gas customers in both Indonesia and Pakistan progressing. • 2006 development programme of approximately 20 wells targeting enhanced production. In total, production growth of over 10% by year end 2006. Exploration • Exciting 2006 exploration programme with high impact wells in Guinea-Bissau and Vietnam - Current wells being drilled in Mauritania and Indonesia - Successful farm-down of Indus-E block in Pakistan from 25% to 12.5% New acreage • Awarded 58.5% interest in Marine IX offshore block in the Republic of Congo • Building a Norwegian business with the award of 5 licences in the recent APA licensing round including an interest in the Froy field. Simon Lockett, Chief Executive, commented: "We are delighted with the progress made by the Company in achieving ourobjectives in the second half of 2005: a growing production base reinforced bynew developments and commercial arrangements which will move us towards ourannual production target of 50,000 boepd. Our high impact exploration programmewill offer shareholders substantial upside exposure in 2006 and we continue toadd prospective acreage to our portfolio in our core areas which will fuel ourgrowth in future years". 18th January 2006 ENQUIRIESPremier Oil plc Tel: 020 7730 1111Simon LockettTony Durrant Pelham PRJames Henderson Tel: 020 7743 6673Gavin Davis Tel: 020 7743 6677 Current Operations We have continued to experience higher gas demand combined with continuingstrong production performance from our Indonesia and Pakistan fields, givingrise to an expected full year production rate of 33.3 kboepd (working interestbasis), in excess of our earlier expectations. Gas sales represented 69% of ourtotal production. UK oil production continued to benefit from the strong Brentrelated crude prices. Average gas prices for 2005 from our principal producingareas were: US$mcf Indonesia 7.90 Pakistan 2.20 Year-end net debt position is around US$33 million before taking into account aJanuary cash receipt from a late December cargo of around US$35 million. Development Programme Continuing good progress has been made towards the successful completion of theChinguetti development, offshore Mauritania. First oil is on schedule for March2006. Premier's share is expected to reach 5,700 boepd by year-end. The partnership group through Woodside the operator is presently engaged inongoing discussions with the Mauritanian Government concerning elements ofagreements which are supplementary to some production sharing contracts. Thesediscussions are not uncommon in the industry as projects reach first production. In Indonesia, good progress has also been made with the construction of the WestLobe platform with the project currently ahead of schedule and within budget. Adrilling rig has been secured for development drilling this summer and first gasfrom the facility is targeted for Q3 2006. Following the November signing of the contract for Phase 2 of the Zamzamaproject in Pakistan, discussions have continued with partners and gas customersin respect of possible increased gas volumes from the Bhit and Qadirpur fieldsin Pakistan and from Gajah Baru in Indonesia. We will drill around 20 development wells during 2006. This programme and ourdevelopment projects are expected to increase production by around 10% by theend of 2006. EXPLORATION 2006 Programme An exciting exploration programme is planned, including potentially high impactoperated wells in Guinea Bissau and Vietnam. The detailed anticipated schedule, including exploration and appraisal wells,can be found on the Company website at www.premier-oil.com The Company is in active discussions with a number of parties regarding possiblefarm-out proposals designed to maintain shareholder exposure to the significantupside in our exploration programme whilst maintaining our target explorationspend for the year. To this end, Premier announces the successful farm-down ofits interest in the Indus-E block in Pakistan from 25% to 12.5% equity, which isanticipated to save Premier approximately $5m in drilling costs. Thepartnership group (operator - Shell) plans to drill the Anne prospect during thesecond half of 2006. Current Drilling In Mauritania, the Stena Tay drilling rig is on site for Dore, the finalexploration well in PSC B for the current drilling campaign. Dore is locatedeast of Tiof, is targeting Oligocene aged submarine channel/turbidite sands and,if successful, could help progress the development plans for the Tiof Area. TheAtwood Hunter drilling rig will begin the 2006 programme in Q2, focused onshallower prospects in PSC A. In Indonesia, the rig for the Macan Tutul exploration well is on location. Thiswell will assess the gas potential of the upper and middle Arang zones anddeeper oil potential in the same area. Future development is envisaged astie-back to the nearby Anoa facilities. Following on from Macan Tutul the rigwill move to the Lembu Peteng structure adjacent to the Kakap field. In Egypt, Premier announces that the Al-Fagr wildcat well has been plugged andabandoned after MDT tests were run. Although shows were recorded while drillingand logs displayed possible hydrocarbon saturations in the target section, nohydrocarbons were recovered on test. The EDC-19 rig is expected back oncontract in approximately six weeks to drill the Al-Amir appraisal well. TheAl-Amir-1 exploration well was drilled on the onshore North West GemsaConcession in the Gulf of Suez oil province approximately 300 kilometres southeast of Cairo. The results of the Palomino well in the UK are expected next week. Oilexcofarmed in to this prospect, which is being drilled at zero cost to Premier.Premier retains an 18.75% interest. New Acreage West Africa Premier has agreed, subject to final signature and parliamentary ratification,to acquire a 58.5% interest (including operatorship) of the Marine IX offshoreblock in the Republic of Congo. The block contains the large Frida prospectwhich is planned to be drilled in 2007. Premier is also in advanced discussions with the Saharawi Arab DemocraticRepublic (SADR) regarding the award of four offshore exploration blocks in whichPremier would hold a 50% equity share. The SADR lies directly north ofMauritania where our Chinguetti oil field is about to come on stream. Norway Premier is committed to building a material business on the NorwegianContinental Shelf. This complements Premier's existing North Sea expertise. Asannounced on 15th December, the Company has been awarded 5 licences in therecent APA licensing round in Norway. Premier has also submitted a further application in the 19th round, the resultsof which are expected to be announced by the end of the first quarter 2006. Thelicence interests obtained to date, all of which are in the central area of theNorwegian North Sea, are as follows: Block No. Working Interest Operator 34/2, 34/5 15% BG34/4 (part), 34/5 30% PetroCanada35/12, 36/10 40% Revus16/1 (part), 16/4 30% Lundin25/2, 3, 5 and 6 50% Pertra(Froy Area) These licences offer a spectrum of redevelopment, appraisal and drillingopportunities which have the potential to meet our objectives for both earlyproduction and high impact exploration. We expect to undertake a number ofseismic programmes during 2006 with a view to a subsequent significant drillingprogramme. The Froy field, which was abandoned in 2001 in a much lower oilprice environment, is the subject of redevelopment studies with plans to seekdevelopment approval in Q1 2007. Further details of the geographical location of these licences can be found onwww.premier-oil.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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