Premier Oil Plc newly appointed Chief Executive Officer Tony Durrant said that one of his priorities is to find a partner to share the 5bn dollar investment to develop the Sea Lion project off the Falkland Islands, because it does not want to become a 'pure Falkland Islands company in five years time'.
“It’s a too-big project for Premier to take on its own,” Durrant said in an interview with Businessweek. “We don’t want to become a pure Falklands company in five years’ time.”
However Durrant said Premier plans to conduct a detailed engineering project design before securing a partner in the venture, since Sea Lion has at least 293 million barrels of recoverable oil off the Falklands.
CEO Durrant who was promoted to the top job at the London-based explorer on June 25 after being chief financial officer for about nine years, told Businessweek he had three immediate priorities to consolidate a share-price gain of more than 20% since he took the job this year.
He plans to bring on-stream the 1.4 billion dollar Solan field located west of Shetland before the end of the year, find a partner to share a 5 billion investment to develop the Sea Lion project off the Falklands, and exceed an oil-production target.
“We have to continue to tick the boxes on the things we’ve been doing, continue to restore credibility, keep the production up, beat the guidance,” the CEO said in his first interview since taking the job.
Premier earlier this week said oil and gas production rose 10% in the first half of the year, driven by the fields in the North Sea. The shares have risen more than 20% since the departure of the previous CEO Simon Lockett on Feb. 4, and Durrant wants to keep investors happy by beating output guidance of as much as 63,000 barrels of oil equivalent a day for this year.
Premier needs “to start to think about new investment, new opportunities,” Durrant said. “We’ve got our list of opportunities -- they are things within the core skills, they are things within core geographies. It’s not shuttering stuff.”
CEO Durrant admitted Premier may reduce its stake by as much as half to 30% in the Sea Lion discovery, which holds at least 293 million barrels of recoverable oil off the Falkland Islands.
Rockhopper Exploration Plc, Premier’s partner in the project, said Amec Plc was awarded a contract for the front-end engineering and design of a platform for the Sea Lion field.
Premier will also continue asset sales, including a possible disposal of its stake in the Chinguetti field in Mauritania, to reach the 300 million target. It has already sold about 200 million “of non-core” assets in Norway, Indonesia and the North Sea, Durrant said.
“Premier is in a very healthy shape,” he said. “We are incredibly well financed.”
The company dropped an extraction target of 100,000 barrels of oil equivalent a day. Nevertheless, the start of new fields such as Solan, Sea Lion and Catcher will allow the producer to reach this output rate, Durrant said.
“We stopped talking about production targets a while back, but not because we are not going to get there, but because cash flow growth is probably more important to investors,” the CEO said.