Good Output Cuts Premier's Debt
UK independent Premier is beating the goals set last year when it agreed refinancing terms, it said March 8, thanks to good performance upstream, continuing cost control and selective disposals of non-core assets.
It produced 75,000 barrels of oil equivalent/day (boe/d) last year, in line with full year guidance and up 5% on 2016. During 2018 it expects production to increase to 80-85,000 boe/d as the UK Catcher oilfield ramps up, offset by natural decline in some fields and the impact of disposals.
The first half of the year saw record output including a full year contribution from the ex-E.ON assets, it said, referring to UK fields that it bought in a reverse takeover in January 2016. These include the 1 trillion ft³ Tolmount discovery, whose final investment decision is expected this year, following an "innovative financing arrangement for the project, establishing an infrastructure partnership for the field facilities." The deal will cut Premier's share of the capex to about $100mn, it said.
UK production, which represents over half the total, rose by a fifth and the E.ON assets continue to exceed expectations at the time of acquisition, in particular Huntington, which contributed 13,000 boe/d, and it remains the highest net producer in the UK portfolio until Catcher ramps up to 60,000 boe/d gross, in April, which is ahead of schedule.
The continuing strong reservoir performance, together with an improved lease rate structure on the FPSO agreed with Teekay, have extended the field's natural life, while the long-life Elgin-Franklin gas and condensate field continued to benefit from an ongoing infill drilling programme. Babbage gas field delivered a strong performance in 2017 underpinned by well intervention and optimisation of the existing well stock.
It said its Indonesian assets performed well, as demand from Singapore was strong; and the operated Natuna Sea Block A fields secured a slightly higher market share, and delivered record production under the second gas sales contract. Its next development is an incremental gas project in Indonesia, which was sanctioned by the Board in March 2017. Bison, Iguana and Gajah Puteri ('BIGP') will back fill Singapore and domestic gas sales contracts. First gas is on course for 2019, and the project is going well and on budget.
Elsewhere it hopes to take its Falklands Sealion field to final investment decision later this year and is contracting a rig to further appraise the giant Zama find, off Mexico, in the second half of the year.