Premier Expects UK Tolmount FID Soon

Premier Oil expects a  final investment decision (FID) this quarter on the Tolmount gas project which it operates in the UK North Sea, having previously given 2H2018 as its target for sanction.

The UK independent said letters of interim agreement have been signed with the platform and pipeline contractors and the terminal for onshore processing of Tolmount gas had been selected.  Premier's board approved the Tolmount project in June and it expects formal sanction by partners in 3Q2018. First gas remains targeted for 4Q2020.

In a trading statement by Premier July 12, the company said its net equity production averaged 76,100 barrels of oil equivalent per day, and has recently on occasions exceeded 90,000 boe/d. Full year guidance of 80-85,000 boe/d is unchanged, it said. Catcher oil and gas field in the UK North Sea, Premier's latest start-up, is now “consistently producing over 60,000 boe/d gross. BW Offshore, the Oslo-listed owner of the production ship FPSO BW Catcher, said it had completed a 168-hour performance test, and that a final acceptance certificate is expected to be received shortly from the Catcher joint venture.

Premier continued its non-core disposal programme during the first six months of the year: its sale announced in April of Babbage Area assets for a total consideration of $88mn to Verus – resulting in net cash proceeds of $64mn to Premier -  is expected to complete 2H2018. Also in 1H2018, it completed sales of its interests in the Kakap field and its 30% interest in the North Sea gas pipe system Esmond Transportation System for $22.9mn.  Premier’s 1H results are due for release August 23.