Premier Oil has cut its forecast for 2019 operating costs following strong production in the first half of the year and ongoing tight controls on spending as it continues to tackle its $2.15bn debt pile.
The London-listed company, whose flagship fields are in the UK North Sea, but also has assets in countries including Mexico, has reduced its forecast for operating costs for 2019 from $13 a barrel to $12. First half production averaged 84,100 barrels of oil equivalent a day, or 11 per cent higher than the corresponding period in 2018 and ahead of budget, putting Premier on track to meet its full year forecast of 75,000-80,000 barrels/day. That target was revised upwards in May.
The group’s UK assets, including the Catcher field which started producing oil at the end of 2017, contributed 57,700 barrels/day during the first half, up 40 per cent year-on-year.
Premier expects to chip $300m off its net debt this year, a burden that built up as it pressed ahead with developing Catcher following the oil price crash of 2014. Net debt had fallen to $2.15bn by the end of June, from $2.33bn at the end of 2018.
Premier Oil’s chief executive Tony Durrant said on Wednesday: “We have delivered a strong first half. I am particularly pleased with the continued high operating efficiency from our producing portfolio which has enabled us to reduce our debt by $180 million.
“This puts us in good stead to meet our debt reduction target for the full year, which remains a top priority for the Group. In addition, we have retained significant optionality with our future developments and an extremely attractive exploration portfolio which together offer substantial upside exposure,” he added.