Premier Oil reduces operating costs as sales drop by more than 30%

Premier Oil has slashed operating costs after posting a 34% dip in revenue against the same period last year.

The FTSE 250 listed stock expected total revenues for the first six months of 2015 to be $580m, well below 2014’s first half figure of $885m.

The company said a drop in figures reflected lower oil prices and lower production year-on-year as a result of the Scott area disposal.

Production had dipped from 64,000 barrels of oil equivalent per day (boepd) last year to 60,300 boepd Premier said, reiterating its 55,000 boepd guidance.

Premier Oil said operating costs would be about 30% lower, at around $150m, from 2014’s figure of $216.9m, due to the sale of the high cost Scott area.

Chief executive Tony Durrant said the company had focused on minimising its cost base.

“Consequently, net debt during the first half has remained flat despite our continuing investment programme,” Durrant said in a statement.

Westhouse described the trading update as solid, and reiterated its ‘add’ rating and price target at 214p.

Analyst Mark Henderson said Westhouse would make modest upward adjustments to its 2015 financial year estimates, as it believed others would.

Shares in Premier Oil were up 0.80% to 137.90p at 0929 BST.