Premier Eyes Tolmount Sanction by End-2018

Premier Oil said May 16, in a trading update ahead of its annual general meeting that day, that it expects its UK North Sea Tolmount gas project to be sanctioned during the second half of this year.

The UK company, which operates the up-to-1 trillion ft³ Tolmount project, said that final documentation with selected contractors is being completed with respect to the platform, pipeline and terminal modifications.  Project sanction is scheduled for 2H2018 and Premier continues to target first gas in 4Q2020.

Net production to Premier in 1Q2018 was 74,000 barrels of oil equivalent per day, down from 81,200 boe/d in 1Q2017. Whilst net output in Indonesia (14,200 boe/d) and Vietnam (16,400 boe/d) were more or less the same in both quarters, UK net production declined to 38,100 boe/d (1Q2017: 43,900 boe/d) - reflecting constrained Catcher oil production. However Premier said: "Export of excess associated gas [from Catcher] into the Segal gas pipeline system is expected to start shortly." Premier acquired the UK Catcher, Huntingdon and Tolmount field interests from E.ON in 2016 and has said they exceeded expectations. Premier and Dana Petroleum each have 50% interests in Tolmount.

Premier also said it hedged 27% of its remaining 2018 UK gas volumes at an average price of £0.45/therm ($6.09/mn Btu).