Premier Oil completes Norwegian assets disposal; sees net debt at $2.3bn

Exploration and production company Premier Oil said it has completed the disposal of Premier Oil Norge AS to Det norske oljeselskap ASA for a net cash consideration of $120m and as a result, it now expects net debt to be just under $2.3bn (£1.55bn) at year end.

The group said it continues to enjoy significant liquidity with $1.2bn of cash and undrawn credit facilities and covenant headroom is expected to be in excess of $800m at the year end.

Premier also provided an operational update.

On the Solan field, progress has been made on the commissioning of the offshore installation systems required for first oil.

Since its trading update in mid-November, tanker trials have been successfully completed and commissioning work has continued using the Superior flotel.

As previously stated, the timing of the start‑up of first oil is dependent on weather conditions; after a favourable weather period for much of September and October, the West of Shetlands area experienced an unprecedented number of different storm fronts during November and early December.

This resulted in poor bridge connectivity between the flotel and the Solan platform and a number of lost days.

“We are continuing to reduce the number of hours required to reach first oil, however we now expect first oil to be in January,” it said.

Meanwhile, drilling operations in the Isobel-Elaine area of the North Falklands basin are ongoing.

The Isobel Deep re-drill well is drilling ahead with results expected early in the New Year, Premier said.