Premier falls on failed well in Vietnam
Shares in Premier Oil slumped 6 per cent yesterday, after the British-based oil explorer revealed that a Vietnam well it had been drilling had failed.
The firm, led by chief executive Simon Lockett, said its Chim Cong well was being plugged and abandoned because “the oil flow rate achieved was marginal”.
Its stock closed down 85p at 1,243p, valuing the company at £1bn.
The Chim Cong well was one of three drilled by the company in Vietnam this year. It said commercial reserves have only found at the Chim Sao North well, where the first oil is expected in mid-2010.
Premier Oil, which has been drilling continuously in Vietnam for the last 18 months now says it will “stand back” and “look at all the data we’ve got and then plan the next campaign” in the area.
The firm’s drilling news overshadowed the 247 per cent rise in first-half net profit to £71.2m it posted on the back of record oil prices and increased output.
Total production increased 11 per cent to 38,000 barrels of oil equivalent a day in the first half.
Crude oil traded in New York at over $100 a barrel for the first time in January and jumped 46 per cent in the first six months of the year.
Premier – which also drills in the North Sea, Indonesia, Mauritania and Pakistan – still expects to pump between 36,000 barrels and 38,000 barrels a day of oil equivalent in 2008, rising to 50,000 barrels a day by the end of 2010.
