Premier Oil Cuts Debt, Plans for Growth

UK Premier Oil made marginally more progress on debt repayment last year than expected, its estimated year-end net debt for 2018 standing at $2.3bn against the previous guidance of $2.4bn and down $390mn on 2017, it said in its preliminary results January 10.

Full year production of 80,500 barrels of oil equivalent/day (boe/d) was up 7% on 2017 and a record year; production averaged 92,000 boe/d, above forecast, in November and December.  

Its Tolmount Main gas project was sanctioned and platform construction started in December; while the "high value"  Tolmount East appraisal well is scheduled to spud mid-2019. A 3-D seismic campaign for the Greater Tolmount area is planned for the first half of this year.

In Mexico its appraisal of the giant Zama discovery is underway and the results of the first appraisal well, Zama-2, are expected shortly, it said.

It has also started 3-D seismic acquisition in the Andaman Sea, Indonesia; and across Block 30, Mexico.

Estimated 2018 total capex of $355mn is below the previously reduced guidance of $365mn while opex for the year is  estimated at $16.9/boe, also below guidance.

CEO Tony Durrant said the company's "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."