Premier Hits Payback on E.ON Deal

Premier has declared, in an upbeat trading update May 15, that its $120mn UK North Sea assets acquisition from E.ON has reached payback only a year after its completion.  Ithaca in contrast said that gas production at its Stella field is suspended, pending platform repairs.

Premier CEO Tony Durrant (pictured below) said: “Premier’s strong operational performance continued into 2017. Production is above budget, the E.ON transaction has already reached payback, costs continue to be managed downwards and Catcher [a North Sea oil development] is on track for first oil later this year. We plan to be cash flow positive in 2017 with more significant debt reduction in 2018.”

Photo credit: Premier Oil 

The E.ON deal included a 50% operating stake in the Tolmount gas prospect, where Premier May 15 said all Feed contracts are now awarded; and for which sanction is expected 1H 2018. Premier is hoping to farm down its 50% interest to 30%.

Premier’s net production averaged 82,000 boe/d in January-April 2017, up 44% year on year.

Ithaca's Stella exports suspended

Ithaca Energy, the Canadian firm now controlled by Israel’s Delek, said that initial gas exports from its North Sea Stella oil and gas field to the Central Area Transmission System pipeline which began last month are “currently temporarily suspended until later this month” pending mechanical repairs to FPF-1 platform pumps.

Full year average 2017 net production by Ithaca is forecast to be in the range of 18,000-19,000 boe/d, it said May 15, reflecting the expected schedule for the step-up in Stella production rates. That contrasts with 1Q 2017 net production of 9,337 boe/d. Stella started up in mid-February 2017.

Delek had acquired 94.2% of Ithaca stock, following a May 3 offer for shares not previously tendered. It now plans to make a compulsory takeover for the remainder, after which Ithaca would be delisted from the Toronto and AIM stock markets.

Mark Smedley