Premier Oil Profits Soar On Output Gains
London-listed Premier Oil reported a 23.5% surge in first-half profits on August 22, on the back of record output levels.
The company, active in the UK, Latin America and southeast Asia, posted profits after tax of $121mn in the six months ending June 30, up from $98mn a year earlier.
Earnings were lifted by rising production at the Catcher oilfield in the North Sea which more than offset a decline in Indonesia. Premier lifted 84,100 boe/day in the period, up from 76,200 boe/day in the first half of 2018. Its full-year target set out in May remains unchanged at 75,000-80,000 boe/day.
Revenues soared to $871.3mn from $625mn, while operating profits climbed to $327.5mn from $185.5mn. The company’s free cash flow more than doubled yr/yr to $182mn, while its net debt fell to $2.15bn at the end of June, from $2.33bn six months earlier.
Premier confirmed it was seeking a buyer for its 25% stake in the Zama oilfield off the coast of Mexico, launching a formal sales process. The move follows an appraisal programme that led Premier in June to raise its P50 resource estimate for the “world-class asset” to 810mn boe. The company is also looking to farm down its 60% share in the Sea Lion field off the Falkand Islands.
CEO Tony Durrant said Premier had exceeded its financial and operational targets for the period. “The company’s strong cash flow is driving debt reduction,” he said, noting that Zama’s divestment and the farm-down at Sea Lion would further bolster Premier’s balance sheet.
Premier’s next milestone will be the launch of the Tolmount gas project in the North Sea, expected by the end of 2020. The project, 50%-owned by Premier, is targeting 500bn ft2 of gas.