Premier Oil doubles profits as it eyes new North Sea project
Premier Oil struck it rich with its half-yearly results today, posting a doubling of profits to almost $100m (£78m).
Higher oil prices pushed the British energy firm’s profits after tax up from $40.7m in the first half of 2017 to $98.4m for the six months to the end of June this year.
The company saw revenues rise 14 per cent to $643m, with higher oil and gas prices making up for lower production so far this year, which Premier blamed on planned shutdowns at its Huntington and Solan fields and lower Singapore gas demand.
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However, a ramping up of production in the firm’s North Sea Catcher field has since boosted production rates by 18 per cent, and Premier expects production to hit between 80,000 and 85,000 barrels of oil per day this year.
Its performance meant Premier managed to bring its net debt down slightly to $2.65bn, while cashflow took a hit from a $50m reduction in the firm’s joint venture cash balance to fall by almost a quarter to $224.6m.
Meanwhile, operating costs increased from $12.4 per barrel to $13.1 per barrel due to higher costs of storing and producing oil in Catcher field.
The results come just a day after Premier approved its Tolmount gas project in the North Sea, which it believes should produce 500bn cubic feet of gas from 2020. It plans to begin construction in December.
Chief executive Tony Durrant said:
“Premier met its operational targets for the period. The Catcher area is now at plateau production rates which, together with higher commodity prices, is driving free cashflow generation and net debt reduction.
“We have progressed our development projects while maintaining strict capital discipline. We can also look forward to a high-graded exploration and appraisal programme which has the potential to deliver very significant value for the business.”
Shares flew up three per cent in early morning trading to £1.25.
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