18th Jul 2007 07:01
Premier Oil PLC18 July 2007 PREMIER OIL PLC ("Premier" or "the Company") Operational and Trading Update Premier today provides an operational and trading update ahead of its 2007Interim Results, which will be announced on Thursday 20th September 2007. HIGHLIGHTS O Completion this year of Scott and North Sumatra acquisitions adding 42mmboe of reserves and resources.O Encouraging initial indications from our India drilling programme.O Excellent progress with development planning activities and preparation for 2008 exploration drilling in Vietnam.O $250 million Convertible Bond completed on attractive terms.O Demerger of Pakistan interests from Premier Kufpec Pakistan joint venture (See separate press release) Simon Lockett, Chief Executive, commented: "The first half of 2007 has seen material steps taken to deliver our mid-termtargets. We completed two acquisitions of complementary assets, secured fundingfor our development activities on attractive terms and made significant progressin Vietnam. We are on track to deliver 50,000 boepd of production by the end of2010, and continue to build our pipeline of high impact exploration activity". 18 July 2007 ENQUIRIESPremier Oil plc Tel: 020 7730 1111Simon LockettTony Durrant Pelham PRJames Henderson Tel: 020 7743 6673Gavin Davis Tel: 020 7743 6677 Production Working interest production for the first half of the year averaged 34,000 boepd(2006 FY - 33,000 boepd). Production (boepd) 1H 2007 2H 2006Asia 11,800 11,500North Sea 8,300 6,600Middle East/Pakistan 12,500 12,100West Africa 1,400 2,200Total 34,000 32,400 The acquisition of an additional 20.05 per cent interest in the Scott field fromHess was completed on 17th May 2007 following the payment of $52.6 million inadjusted consideration. Premier's working interest in the Scott field is now21.83 per cent. Additional Scott production of approximately 5,000 boepd hasbeen consolidated into Premier's production from 18th May 2007. Currentrun-rate for group production is in excess of 38,000 boepd. Cash receipts of$42.1 million from our first Scott cargo following the acquisition were recordedon 3rd July 2007. Financials Cash flows for 1H 2007 benefited from strong oil and gas prices with oilproduction sold at an average of $65 per barrel, (1H 2006: $66) a 3% premium toBrent. Average realisations for our Indonesian gas sold into the Singapore market for1H 2007 were $9.6 per mmscf (1H 2006 $9.9 per mmscf). Development capex for the full year is expected to be around $200 millionincluding $89 million for the acquisitions of an additional 25% interest inNorth Sumatra Block A ($36 million) and an additional 20.05 per cent interest inthe Scott field ($52.6 million). Exploration capex for the year is on target atless than $100 million before tax and recoveries. At 30th June 2007, Premier had an estimated net debt position of $25 millioncompared to a net cash position of $41 million at 31st December 2006. Thistakes into account the proceeds of a $250 million convertible bond, completed on27th June 2007. Approximately $50 million of the bond issue will be treated asequity in the group balance sheet. Proceeds of the issue have been used torepay existing borrowings and will fund Premier's forward developmentrequirements. The 7-year convertible bond carries a fixed rate coupon of 2.875per cent per annum. Development Premier is on course to exceed its production target of 50,000 boepd by the endof 2010. Vietnam Block 12W Blocks 12E and 12W have been merged according to the PSC terms prevailing inBlock 12W. The 3D seismic acquisition over Block 12W completed in June 2007 isbeing processed and interpreted. Early results suggest confirmation of theinitial estimate of 80 mmboe of recoverable reserves at Dua/Blackbird.Reservoir and facilities development studies are underway with concept selectionexpected by end 2007, and project sanction in 1H 2008. An expression ofinterest document is being prepared for potential FPSO suppliers. First oil isexpected in 2010. Indonesia Natuna Sea Block A Following successful completion of the four-well West Lobe development drillingprogramme, it was decided not to drill a fifth development well. The Seadrill-5rig has been released to dry dock for repairs. The Central Lobe oil developmentwell and the remaining exploration programme for the second half has beendeferred. Discussions regarding the commercial framework for further gas sales intoSingapore and Batam Island continue. We await formal Indonesian governmentapproval of the terms. North Sumatra Block A Premier's purchase of an increased equity stake in North Sumatra Block A wascompleted in January 2007 for $36 million. Medco Energi assumed operatorshipand have been pursuing gas sales negotiations and a plan of development for theAlur Siwah, Alur Rambong, and Julu Rayeu fields. A gas sales MOU has beensigned and in accordance with the draft development plan, first gas from thisproject is on schedule for 2010. Initial studies have been completed on thepotential to recover additional oil reserves elsewhere on the block. Pakistan As announced separately today, Premier has entered into an agreement with KuwaitForeign Petroleum Exploration Company KSC ("Kufpec") to de-merge theirrespective interests in Pakistan from the Premier Kufpec Pakistan joint venture.The demerged field portfolios will be run as separately owned businesses byPremier and Kufpec. Premier's development asset programme in Pakistan continues apace. ZamzamaPhase II is proceeding according to plan and an additional 150 mmscfd (gross) isexpected to be available from August 2007. Bhit/Badhra Phase II is progressingwell, with plant capacity being expanded to 315 mmscfd. First gas from thisexpansion is expected by the end of 2007. Further plant expansion at Qadirpuris proceeding to increase capacity to 600 mmscfd from 500 mmscfd. First gas isanticipated by the end of Q1 2008. Successful completion of these incrementalprojects will add 15 mmscfd to Premier's net production. Norway Froy Extensive redevelopment studies have been progressing well with plans to submitan application for development approval early in 2008. The operator has issuedan Invitation to Tender (ITT) for the Engineering, Procurement, Construction,Installation and Commissioning (EPCIC) contract for the provision of a MobileDrilling and Production Unit on schedule for first production in 2010. Theoperator estimates recoverable reserves of 62 mmboe (Premier net share 31mmboe). Exploration India On 5th July 2007, Premier provided a status report on the operated Masimpur-3well which is drilling in Assam, India. At a measured depth of 4002m, asandstone formation was encountered with good hydrocarbon shows and highformation pressure. The mechanical difficulties referred to in the pressrelease have been resolved without the need to sidetrack the well. 7 inchcasing has been set and the well will shortly drill ahead to target depth.Premier will provide a further update in due course. Following completion ofoperations on Masimpur-3, the rig is available for two further wells on theCachar block for the second half of 2007. Premier holds a 14.5% interest in theCachar Block. Indonesia The Pancing-1 well on the Kakap Block in Indonesia was spudded on 28th June bythe Frontier Duchess rig. The well is expected to reach target depth byend-August and is targeting a 100 bcf gas prospect. Premier holds an 18.75%interest in the Kakap Block. Pakistan The Anne-1 well is expected to spud in late August 2007. This prospect couldcontain up to 300 mmbbls is the first well to be drilled in the deep water(1,300 metres) of the Indus Tertiary delta. Premier holds a 12.5% interest inthe Block. Philippines The Monte Cristo well is expected to spud in late Q3 2007 and is targeting a 20mmbbl gross oil prospect. This well will test a prospective trend in the PanaonLimestone Formation. Premier has previously announced the farmout of half itsinterest in the SC-43 licence in the Ragay Gulf to Pearl Energy and PNOC inreturn for a full carry on the Monte Cristo well. Premier now holds a 21%interest in the SC-43 licence. Gabon The Themis Admiral Marin-1 well is expected to spud in late 2007. Premier willoperate the well and holds an 18% share in this oil prospect. Future Exploration Programme Vietnam A 3D seismic acquisition programme was completed over Block 12W in June 2007,preparatory to a full drilling programme anticipated for March 2008. Rigtenders have been received and are currently under evaluation. Potentialtargets include high impact exploration wells on the Peacock, Falcon and ChimDau prospects. Chim Dau is located immediately south of Premier's 2006 Duadiscovery. Premier holds a 37.5% interest in Block 12W. Further exploration isplanned on adjoining acreage in Vietnam and Indonesia in 2009. Congo Premier is planning to spud its first well in Congo on the Marine IX Block inlate 2008. A 3D seismic survey and interpretation are being conducted over theFrida and Ida prospects in 2007. Each prospect is targeting approximately 270mmbbls gross of oil. Premier holds a 58.5% operated interest in the block. Norway Premier plans to spud its first Norwegian well in Q1 2008 on the Breamdiscovery. Bream is an undeveloped oil field discovered in 1971. Premier wasawarded a 20% interest in the PL407 Bream Appraisal block in January 2007. Itis expected that this will be followed by Premier's first operated well on theneighbouring PL406 Bream Exploration block in 2009 where Premier holds a 40%interest. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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