New hydro-carbon finds in the southern North Sea will add major capacity to Premier Oil’s lucrative prospects as it reduces debt by £233 million to £1.56 billion.
Premier, which announced its half-yearly results, operates oil fields in the Catcher, Kyle and Elgin/Franklin fields in the North Sea off Aberdeen. They also have assets in the Huntington, Balmoral Area, the Solan, west of Shetland Islands, and Tolmount, north of the Humber in the southern North Sea.
Premier’s UK assets averaged 55.3 kboepd (thousand barrels of oil equivalent per day), a 27% increase on the prior corresponding period driven by a full contribution from the Catcher Area at higher rates. The current price of Brent crude oil is $62 per barrel.
The Catcher Area averaged 34.5 kboepd (net, Premier 50%), achieving an extraordinary operating efficiency of almost 100%. This continued performance resulted in the group achieving cash payback on the Catcher Area project at the end of October, 22 months after first oil.
The company has formal approval of the Catcher Area satellites with first oil targeted for early 2021. The Elgin Franklin Area produced 6 kboepd (net, Premier 5.2% interest), ahead of expectations and supported by on-going well intervention campaigns. Production from the Huntington field averaged 6 kboepd (Premier 100% interest), with a four week scheduled maintenance programme successfully completed at the end of August.
Tony Durrant, chief executive, said “We continue to deliver on our strategic priorities. We are generating significant free cash flow, which is materially deleveraging our balance sheet. At the same time, we are actively managing our portfolio and selectively progressing growth projects at the right exposure. We also continue to create value through the drill bit and to build material new positions in emerging exploration plays at low cost.”
Premier is in discussions with the Huntington FPSO provider about options to extend economic production again to beyond April 2020. Premier’s operated Solan field delivered 3.6 kboepd (Premier 100 per cent interest) and preparations are well advanced for the 2020 Solan P3 drilling campaign. Premier’s other UK assets have performed in line with expectations.