Premier's UK Tolmount Field Due for 2018 Sanction
Front end engineering design (Feed) is underway on phase one at the 1 trillion ft³ Tolmount gas development in the southern UK North Sea, operator Premier said August 24, and final investment decision is expected in 1H 2018.
It has signed a heads of terms for an infrastructure partnership with the Dimlington terminal operator regarding the development of the facilities, and Premier’s share of capex to develop Tolmount is now only $100mn (at 50% equity).
“On this basis, Tolmount is a very attractive project, meeting our economic thresholds even at low gas prices, allowing us to use our UK tax losses and with significant further reserve upside," said Premier CEO Tony Durrant.
The first half year also saw “good progress" on the [UK] Catcher project; "a world class exploration success in Mexico and the acceleration of cash flow from disposals.” On August 22 it had announced agreement with an unnamed third party for the disposal of its entire 33.8% interest in the UK onshore oilfield Wytch Farm for a proposed $200mn.
Premier declared profit after tax of $40.7mn on 1H 2017 trading, down from a year-ago $167.1mn profit that included one-off non-cash credits. Production was 82,100 barrels of oil equivalent/day, up 34.5% year on year, while guidance for the full year 2017 is increased to 75-80,000 boe/d, from 75,000 boe/d, with Catcher on schedule for first oil in 2017 and with an improved field production profile now anticipated.
Former E.ON assets – including UK Catcher, plus Huntington and Tolmount gas – “continue to exceed expectations at the time of the acquisition,” it said.
"UK production, which now represents over half of group production, saw particular outperformance by the Huntington field, which was the highest net producer in the portfolio. In Asia, demand for our Indonesian gas was strong with our Natuna Sea Block A again capturing market share," Premier said. The re-instatement of the Rita gas field, shut-in for almost two years, plus well re-instatements at the Johnston gas field, added 1,500 boe/d net to Premier.
Mark Smedley