MercoPress. South Atlantic News Agency

Falklands' Sea Lion project boost after Premier announces a very positive half year financial result

CEO Tony Durrant said that he was particularly pleased with the operating efficiency of Premier Oil and the fact “we have delivered a strong first half”

Premier Oil on Wednesday reduced its forecast for its 2019 operating costs to US$12 per barrel of oil equivalent (boe) from US$ 13 and expects debt reduction to reach the upper end of its US$ 250-350 million target by year-end.

The oil company, which has its production assets mainly in the British North Sea and southeast Asia, and also exploration interests in Mexico, Brazil and the Falklands Islands, provided an update on recent operational activities and guidance in respect of its half year financial results to 30 June 2019.

These include plans for further activities in the Falkland Islands' Sea Lion project to be submitted to export credit agencies for the senior debt component of the project financing structure.

Premier had a debt of around US$ 2.3 billion in December, expects to give the final go-ahead for two satellite fields to its North Sea flagship oilfield Catcher next month to extend the period the project produces at 66,000 boe per day.

The company said its output had averaged 84.1k barrels of oil equivalent per day, up 11% on-year. The growth had kept Premier Oil and track to meet its guidance for the full year of 75k-to-85k barrels of oil equivalent per day.

Commenting on the company's performance, CEO Tony Durrant said that “We have delivered a strong first half. I am particularly pleased with the continued high operating efficiency from our producing portfolio which has enabled us to reduce our debt by US$180 million.

He added this puts the company “in good stead to meet our debt reduction target for the full year, which remains a top priority for the Group. In addition, we have retained significant options with our future developments and an extremely attractive exploration portfolio which together offer substantial upside exposure”

Regarding the Falklands, Premier revealed that a comprehensive set of independent expert reports on the Sea Lion project in the North Falklands Basin has now been completed.

“These, together with the Preliminary Information Memorandum, will form the basis of a loan application package which Premier plans to submit imminently to export credit agencies for the senior debt component of the project financing structure”.

Premier which is also active in Mexico said that the 3D seismic survey acquisition across Block 30 (Premier 30%) was completed in July. The data will be processed to delineate the full extent of the Wahoo prospect, which exhibits analogous direct hydrocarbon indicators (DHIs) to the Zama discovery, in preparation for 2020 drilling, as well as to mature other prospectivity on the Block, including the Cabrilla prospect.

Elsewhere in Mexico, Premier’s exploration plan for its Burgos Blocks 11 and 13 (Premier 100%) were approved by CNH. Reprocessing of 3D seismic will be completed ahead of a drilling decision.

In Brazil, Premier is actively engaging rig contractors with available units in country for a rig to drill its Berimbau/Maraca prospect on Block 717 (Premier 50%) in 2020.