Premier Oil said today that its investment in the Catcher project had already been covered by production from the field.
The initial expenditure on Catcher, which came on stream just 22 months ago, was around £1.3 billion, with Premier paying half.
London-headquartered Premier said “project cash payback” had been reached.
Premier also said it had been granted formal approval to tie the Catcher North and Laverda fields back to the Catcher FPSO.
The Gorrilla V1 rig will drill the two development wells in the middle of next year, with first oil slated for early 2021.
Alongside the Varadero infill well, they should help extend plateau production from Catcher.
Catcher, in the central North Sea, produced 69,000 barrels of oil equivalent per day in the first 10 months of 2019, achieving operating efficiency of almost 100%.
Premier, as operator, has a 50% stake in the Catcher area.
Group production averaged 79,400 boe per day over the 10 months and is expected to come in at the upper end of the firm’s full-year guidance of 75-80,000 boe per day.
During the reporting period, Premier generated £234 million of free cash flow, reducing its net debt from £1.82 billion at the end of 2018, to £1.58bn.
The Tolmount development in the southern North Sea remains on track for first gas at the end of next year.
Electrical fit-out of the topsides has commenced and roll-up of the jacket frames is scheduled for early December.
The field is expected to produce 500 billion cubic feet (bcf) of gas. Premier is the operator with a 50% stake. Its partner is Dana Petroleum.
Recent highlights for Premier include the discovery of gas at the nearby Tolmount East field, from which the company hopes to produce 220 bcf.
The company hopes to sanction the project in the second half of next year.
Tolmount East will be developed as a tieback to the main Tolmount field.
Chief executive Tony Durrant said: “We continue to deliver on our strategic priorities. We are generating significant free cash flow, which is materially deleveraging our balance sheet.
“At the same time, we are actively managing our portfolio and selectively progressing growth projects at the right exposure.
“We also continue to create value through the drill bit and to build material new positions in emerging exploration plays at low cost.”
David Barclay, senior investment manager at Brewin Dolphin, said: “Premier Oil’s production levels have dipped slightly compared to the half-year average reported in the summer, dropping from 84,100 barrels of oil per day to 79,400.
“Despite this, the full year production estimate of 75,000-80,000 barrels of oil per day remains unchanged. Premier’s Catcher Area holds its place as the cream of the crop with strong output levels reported from this field once again.
“A fast-track development project is well underway to support the recent discovery of gas at Tolmount East and this is expected to have a further impact on production, once drilling starts in mid-2020.
“Overall debt levels remain high, but the company has reported a $300m reduction, which is deemed to be in line with guidance.
“What’s yet to be seen is the impact of the sale of its Zama oil field, which now has an extended bid deadline to December.”