Premier Oil exceeds expectations with debt reduction drive

Premier Oil's Catcher FPSO
Premier Oil's Catcher FPSO

Premier Oil’s debt reduction drive exceeded expectations in 2018, buoyed by record annual production.

London-headquartered Premier trimmed its net debt by £300 million to £1.8 billion at the end of last year, below its previous guidance of £1.88bn.

Full-year production totalled 80,500 barrels of oil equivalent per day (boepd), up 7% on 2017.

In its half-year results package in August, the company set its 2018 production guidance range at 80-85,000 boepd.

Output averaged 92,000 boepd in November and December, and Premier’s Catcher FPSO in the central North Sea is producing at increased oil rates of 66,000 boepd.

Other highlights from last year included approval of the Tolmount gas development in the southern North Sea.

Another appraisal well at the site is scheduled for the middle of this year, as is further 3D seismic acquisition.

Results of the first appraisal well at the huge Zama discovery in the Gulf of Mexico are expected soon.

Capital expenditure totalled £275m, while Opex came to $16.9 per barrel, both below guidance.

Premier chief executive Tony Durrant said: “Our strong operational performance and disciplined expenditure have enabled us to reduce our debt levels ahead of forecast.

“At the same time, we have continued to build our portfolio for the future, sanctioning our high value Tolmount Main gas project and capturing highly prospective new acreage in Mexico and Indonesia.

“Looking to the year ahead, we have a strong production base which is well hedged and our priority remains to further reduce our debt levels while progressing our future growth projects to final investment decisions.”

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