Premier Oil plc provides an update on its recent operational activities. Production year-to-date has averaged 57.1 kboepd.
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Summer maintenance activities have been successfully completed and production has returned to previous levels. As a result, production remains ahead of full year guidance of 55 kboepd, before any contribution from Solan.
Premier has hedged approximately 60 percent of its 2015 2H liquids production at $92/bbl and 30 percent of its expected liquids production in 2016 at $68/bbl. Premier will continue to seek to add to this position as market conditions allow. As a result of significant cost savings, Premier continues to expect full year opex of c. $16/boe.
Premier anticipates first oil from Solan in Q4 2015, as previously guided. Good offshore productivity and 97 percent uptime has been achieved with the Regalia flotel.
A number of the critical path platform systems have now been successfully commissioned including the firewater deluge system and other safety related systems such as the gas detection system.
34,000 hours of planned commissioning activity remains to first oil (down from 56,000 hours at the time of the company's Half-Yearly Results in August) and these are being liquidated at a rate of 600-800 hours per day. Completion of the commissioning of the subsea infrastructure is also progressing well.
2015 full year capex guidance is unchanged and Premier continues to forecast a significant reduction in year-on-year capex in 2016.
Premier continues to enjoy significant liquidity with $1.3 billion of cash and undrawn credit facilities.
The company's long term unsecured debt structure means that Premier is not subject to borrowing base redeterminations and the company has no maturities on any of its debt instruments until end 2017.
Its principal $2.5 billion bank facility is not due for refinancing until mid-2019.
As announced at the Half-Yearly results, Premier has increased its financial flexibility with the successful renegotiation of its covenants out to mid-2017. ■