Premier Oil achieves plateau-production from N. Sea Catcher field

Premier Oil Catcher FPSO
Premier Oil Catcher FPSO

North Sea oil explorer Premier Oil has forecast that that its operating costs will be around $17-$18-barrel this year.

The Edinburgh-registered minnow – which operates the Catcher field and others – also announced that its combined exploration and decommissioning costs this year will total some $380 million.

Premier’s operated Catcher Area averaged 13.3 kboepd (net) for the first half, reflecting constrained production as commissioning of gas processing systems and the water injection plant was completed.  Plateau production rates of over 60 kbopd (gross) were reached in May following the start-up of gas export into the SEGAL gas pipeline.

The Catcher Area averaged over 50 kboepd (gross) during June with plant availability continuing to increase as commissioning of the secondary systems is being completed ahead of final acceptance of the FPSO. Until then, Premier benefits from a reduced day rate for the FPSO when plateau production is not achieved.

Chief executive Tony Durrant said: “With Catcher now delivering stable-plateau production, this is an important milestone for Premier. 

“This, coupled with the ongoing strong performance from our underlying portfolio and our continued focus on cost control, will result in significant free cash flow generation and material debt reduction in the second half of the year. “

On the Premier-operated Tolmount gas project, letters of interim agreement have been signed with the platform and pipeline contractors and the terminal for onshore gas processing selected. 

Premier’s Board approved the Tolmount project in June and formal sanction by partners is scheduled for Autumn 2018, with Premier scheduling first gas in the fourth quarter of 2020.

In its Falkland Islands basin, a pathfinder bank has been appointed to secure finance for Premier’s  Sea Lion project ahead of a final investment decision.

Alasdair Ronald, Senior Investment Manager at Brewin Dolphin Glasgow, commented: “In recent months financial institutions have become increasingly positive on the prospects for Premier Oil and their growing confidence has been justified by today’s trading statement. 

“While the company remains positive on prospects for the oil price, it must be remembered that Premier Oil is a leveraged play and the price of oil will be a major factor affecting future profitability.”

13 Jul 2018

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