Premier yesterday provided an Operations Update summarising key activities since the Interim Management Statement on 14 May 2014 and a Trading Statement in respect of its half year financials to 30 June 2014. This is in advance of the Group’s 2014 Interim Results which will be published on Thursday 21 August 2014.
Tony Durrant, Chief Executive, commented:
“Recent performance across our portfolio has been strong. We have exceeded our production targets, disposed of non-core assets, received Government sanction of the Catcher project and successfully completed our bank refinancing. These are all priorities that we set ourselves for the first.”
In the UK, production averaged 21.2 kboepd, an increase of 56 per cent on the first half of 2013 due to the inclusion of the Huntington and Rochelle fields. Huntington is currently producing around 25 kboepd.
To date, the impact on Huntington production due to the ongoing CATS summer maintenance programme has been smaller than anticipated. Elsewhere in the UK, good performance was achieved from Premier’s operated Balmoral area, driven by strong production from Premier’s 100 per cent owned Brenda field. Production from Wytch Farm was also strong in the first half with four additional wells being brought on-stream.
In June, Premier obtained UK government approval of its Catcher area Field Development Plan. All major contracts for the project have been awarded and the project is progressing to plan in the execution phase.
Elsewhere in the UK, re-development of the Kyle field is nearing completion. The Banff field FPSO arrived on location in Q1 and riser installation linking Kyle to the Banff facilities has been completed. The operator is forecasting first oil from Kyle before the end of July.
In Norway, FEED engineering work for the Premier-operated Bream development is underway and negotiations for the provision of a FPSO are progressing. A project sanction decision is targeted for year-end.
Pre-development activities on the Sea Lion project in the Falkland Islands continue to progress. On the TLP, the functional specification and basis of design has been finalised and award of the FEED contract to specialist contractors is imminent. In the second half of the year, a geotechnical survey will be performed at the Sea Lion location and the results of this will be incorporated into the FEED process, which is expected to take around 12 months to complete.
Total revenues for the first half 2014 will be in the order of $880 million (2013 H1: $758 million). Profits will reflect an approximate $30 million after-tax charge recorded for estimated future abandonment costs of the Balmoral Area.