Premier Oil dives deep into the red, but sees positive prospects in new fields in Falklands Isles and N. Sea

Premier Oil's Solan platform, off Shetland isles
Premier Oil’s Solan platform, off Shetland isles

Edinburgh-registered Premier Oil dived deep into the red in its financial year ending 31 Dec 2017, when it yesterday reported a loss of $253.8 million – compared to a profit of $122.6 million in the previous year.

But chief executive Tony Durrant said: “2017 was a successful year for Premier with the refinancing completed, our producing portfolio performing well, the Catcher field brought on-stream and the notable Zama oil discovery in Mexico.

“And 2018 will see further production growth, allowing us to deliver on our plans for reducing net debt to restore balance sheet strength while also progressing projects that deliver the highest financial returns.

“In the prolonged crude oil price downturn, our priority has been to take measured actions to reset our business to meet near-term priorities. Our comprehensive debt refinancing, incorporates a plan for net debt reduction and, over time, selective investment in new projects such as Tolmount and Sea Lion.”

During the year, it kept costs down – at an average cost of $16.4-barrel – while capital investment more than halved (58%) to $275.6 million. Premier expects 2018 cap-ex to rise modestly this year to around $300 million by the year-end.

Other operating highlights during the year included the go-ahead for its southern North Sea Tolmount gas field.

Premier also expects to make a final investment decision by the end of this year on its Sea Lion field in the Falkland Islands.

French oil giant leapfrogs Shell in N. Sea

Meanwhile, French oil major Total yesterday completed $7.5 billion purchase of Denmark’s Maersk Oil and Gas to leapfrog Shell as the second biggest producer in the North Sea.

The deal brings 160,000 b/d of oil equivalent production to Total this year and renews its North Sea portfolio with some big new projects.

9 Mar 2018

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