Premier Slashes 2020 Output Forecast Again
UK oil producer Premier Oil has cut its production guidance for 2020 to 61,000-64,000 barrels of oil equivalent/day due to constraints at the Catcher oilfield in the North Sea, it said on November 12.
Catcher is Premier's main producer, netting the company 26,500 boe/d of output through its 50% stake towards the end of October. After an August shutdown the field resumed plateau production in September, but towards the end of the month output was constrained due to a produced water plant being offline while a build-up of calcium naphthenate was removed. The work took longer than expected and the plant was not brought back online until early November.
A fire then broke out on November 9 at electrical equipment at the Catcher floating production storage and offloading (FPSO) unit, although no one was injured and the fire was swiftly extinguished. BWO, the operator of the vessel, is looking to restart production within the next week, Premier said.
Premier was targeting 75,000-80,000 boe/d of production in 2020 in November last year, but cut its forecast to 70,000-75,000 boe/d in January. It then revised its guidance to 65,000-70,000 boe/d in May, citing an unplanned outage at Catcher. The company also ceased production at the Huntington field in April, and will take the same step at the Balmoral area in November, as these projects cannot generate cash at current prices.
Premier brought on stream a third production well at its 100%-owned Solan field on September 15, which is free-flowing at rates of up to 9,500 boe/d and is expected to flow over 10,000 boe/d. The company also noted that the Tolmount gas project was still on track for first gas in the second quarter of 2021, adding 20,000-25,000 boe/d to Premier's output at plateau. The launch had been scheduled for 2020 but Premier pushed it back a year in August, citing the impact of the coronavirus pandemic.
Premier has installed a platform and started drilling four development wells at Tolmount. It operates the field with a 50% interest and had hoped to buy a further 25% from South Korea's Dana Petroleum, but scuppered that deal in July. After many months of negotiations, Premier also shelved an agreement to acquire some BP North Sea assets in October, while announcing a merger with fellow UK operator Chrysaor. Premier won creditor support for the tie-up earlier this month, with the transaction expected to close in the first quarter of 2021.