Premier Oil upgrades production guidance after ‘record’ first half

Premier Oil has upgraded full year production after setting a new company production record in the first half of 2017.
The oiler confirmed average output volumes of 82,100 barrels oil equivalent per day for the six months ended June 30, up 34.5% on the same period of last year.
It now lifts the top end of its guidance for the full year to 75,000 to 80,000 boepd, up from 75,000 boepd.
“Premier continues to deliver excellent operational performance, which will drive free cash flow and the reduction of net debt,” said Tony Durrant, Premier Oil chief executive in a statement.
He added: “Following the successful completion of our refinancing, we are ahead of plans to restore financial strength while progressing a number of exciting projects for future growth.”
Durrant highlighted that Premier saw “good progress” with the Catcher and Tolmount projects, and a world class exploration success in Mexico.
Earlier this week, the company announced a US$200mln deal had been agreed to sell the Wytch Farm onshore UK oil field.
Positive financials
Premier reported a US$40.7mln profit after tax versus US$167.1mln (including one-off non-cash credits) for the first half of last year.
Cash flow from operations amounted to US$292mln in the first half, which as Premier highlighted was up some 168% on the preceding period.
Meanwhile, earnings (EBITDAX) from continuing operations were reported as US$325.9mln, up from US$162.7mln in the same period of 2016, boosted by production volume growth as well as better oil and gas prices.
The debt pile amounted to US$2.7bn at the end of June, and the group had some US$307mln of cash resources.
Catcher field on track for 2017 start-up
Whilst Premier was upbeat on the past performance through 2017, the outlook was similarly positive in its outlook for the remainder of the year – with the Catcher field on track for first oil during the period, which will deliver a further lift to the production profile.
Catcher coming online will boost cashflow and, significantly, support accelerated debt repayment, and Premier said it is targeting a leverage ratio of 3x EBITDA by the end of 2018.
   
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