Premier Oil production continues to surge
Premier Oil produced more oil and at a lower cost than expected in the first four months of the year and as its new Catcher project in the North Sea comes on stream, plans to be cash flow positive for the year.
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Production averaged 82.6k barrels of oil equivalant per day (boepd), up 44% on the same period last year.
However, until the summer maintenance period has been completed, management do not plan to update their full-year guidance of 75 kboepd, which excluded any contribution from Catcher, which is scheduled for first oil later this year.
Operating costs were 11% below budget at $13.7 per barrel and full year capital expenditure guidance for development, exploration and abandonment has been reduced to $350m from $390m.
Chief executive Tony Durrant pointed out that UK production was 160% on the prior corresponding period helped by a full contribution from acquired former E.ON assets, with the E.ON transaction having already reached payback.
With a marginally positive period of free cash flow, net debt was stable at $2.8bn, with cash and undrawn facilities standing at around $585m.
"We plan to be cash flow positive in 2017 with more significant debt reduction in 2018," Durrant said.
"We look forward to the spudding of the Zama prospect in Mexico, a potentially transformational well for Premier.
"Our refinancing, shortly to be completed, incorporates a plan for net debt reduction and, over time, selective investment in new projects. We are ahead of plan."