Premier Oil said its Solan project is on track to produce its first oil by the end of the year off the west coast of Shetland.
The company said it also expected first oil from the Catcher project in 2017 as it posted its results for the first 10 months of the year.
The progress of the Solan field, which Premier has spent $1.76billion on so far,will be “subject to weather” in the UK North Sea.
Premier said good offshore productivity and high uptime had been achieved with the Regalia flotel between September and October.
The first pair of producer-injector wells have already been successfully tied in and drilling of the second producer well commenced in July, completing more than 100feet of the reservoir section.
However, technical difficulties were encountered during drilling of the remaining reservoir section and the well has since been suspended.
Premier said the Ocean Valiant rig is currently drilling the second injector well and the second producing well is expected to be side-tracked next year.
The company said the move will have “no impact” on first oil from the Solan field.
Premier said it has already reduced its costs by 25% in the past year and expects this to continue with “significantly lower” costs in the next year with a further savings in their underlying operating costs of 5-10% predicted.
A 12-18 month hedging programme has been put in use to help protect the company’s cash flows.
Development capital expenditure is expted to be $850million, which is lower than a previous guidance of $900million.
Exploration spend is also expected to be $200million – $40million lower than previous estimated – as the completion of the company’s Falkland drilling campaign moves into the next year.
Tony Durrant, Chief Executive, said: “Premier continues to benefit from stable production and valuable hedging contracts.
“Commissioning on the Solan project progressed well during good autumn weather and the field remains on track for first oil by year-end.
“The Catcher project is on schedule and on budget. Looking ahead, we see reduced capital expenditure and significant cost reductions for both our current and future projects to mitigate the current oil price environment.”
The company’s production averaged around 57.5 thousand barrels of oil equivalent per day.
Meanwhile Premier said the subsea installation work set for 2015 is complete with the successful installation of the pipeline and manifold and tow templates at Burgman and Varadero.
Two wells have so far been drilled and are also ahead of schedule and under budget.
The company said operations on the first Catcher injection well were completed with good operational performance and reservoir results.
A second water injector has been drilled and is now in the final stage of completion also.
The fabrication of the FPSO hull and topsides is on-going in Asia and the sail-away date is expected to be on time.
Earlier this week Subsea 7 said it had signed a long-term partnership frame agreement with Premier Oil to provide concept engineering, FEED, SURF project execution and life of field operations.