Premier Oil announces trading and operations update

Premier Oil has provided an update on recent operational activities and guidance in respect of its half year financial results to 30 June 2020.

• Production averaged 67.3 kboepd to the end of June; 2020 guidance of 65-70 kboepd (before any contribution from the proposed acquired BP assets) reiterated

• Solan P3 successfully drilled and due on-stream in September; forecast to add about 10 kbopd to Group production rates in Q4

• Tolmount: final onshore commissioning of topsides underway prior to August sail-away; on track to meet previously revised Q2 2021 first gas date, adding 20-25 kboepd (net, Premier 50 per cent)

• Forecast 2020 total capex (US$340 million), opex (US$12/boe) and lease costs (US$6/boe), reflecting US$240 million of savings and deferrals secured

• Amended BP acquisitions approved by creditors, subject to agreed refinancing terms and equity funding; adds 17 kboepd (net) from targeted completion date of 30 September

• Discussions with a subset of Premier’s creditors regarding a long term extension to the Group’s credit maturities underway; aim to agree terms which can be recommended to the full lender group by the end of July

• Net debt reduced to US$1.97 billion as at the end of June (31 December 2019: US$1.99 billion), financial covenants waived through to end September; forecast free cash flow positive for full year 2020 at current forward curve

Tony Durrant, Chief Executive, commented: ‘The continued underlying performance of our core assets along with the decisive action we have taken to reduce our expenditure during the first half has resulted in our net debt remaining broadly flat despite significantly weaker commodity prices during the period.

‘This, together with the expected agreement on the amendments to our credit facilities and the completion of the value-accretive BP acquisitions, positions us well to benefit from a recovering oil price.’

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Source: Energy-pedia