Premier Oil is in “final negotiations” with contractors ahead of an investment decision being made on the proposed Tolmount East development.
The project, an extension to the 500 bcf main Tolmount gas field in the North Sea, has potential to “add significantly” to the development.
In a trading update, the firm said: “On the proposed Tolmount East development, Premier is now in final negotiations with its selected contractors ahead of making a final investment decision on the project. Once on-stream, Tolmount East will help extend plateau production from the Tolmount Area.
“In addition, in September, Premier was awarded two licences directly adjacent to its Tolmount Field Development Area and is in the process of maturing a number of leads and prospects which, in the success case, could be developed via the Tolmount infrastructure.”
In August, Premier Oil said it expected a final investment decision on Tolmount East around the end of 2020.
It comes as drilling work for the main Tolmount field is underway and “remains on track for first gas in Q2 2021”, the company said.
Also on the trading update, Premier said a third production well at its Solan field west of Shetland – P3 – was brought online on September 15.
The well is expected to reach rates of 10,000 barrels of oil per day.
Premier also gave an update on production from its flagship Catcher field.
Premier Oil, who announced last month it would be merging with Chrysaor, said that deal is expected to complete in Q1 2021.
The firm plans to publish a prospectus, including an independent evaluation of Chrysaor’s reserves, and a shareholder circular by the end of the year.
CEO Tony Durrant said: “The merger with Chrysaor, which will create a Combined Group with diversity, scale and balance sheet strength, is progressing to plan.
“We now have creditor approval and we expect to publish the prospectus in December, with completion on track for the first quarter of 2021.”