Premier Oil to meet upper end of 2016 production guidance

Premier Oil on Wednesday said it was on track to deliver “at or above” the upper end of its 2016 guidance.

The group has forecast between 65,000 to 70,000 barrels of oil equivalent per day for the year.

In a trading update for the period 1 January to 30 April, the company said it has achieved “strong production” following the acquisition of E.ON’s UK North Sea assets on 28 April and the commencement of oil production from the Solan field on 12 April.

"Strong production performance from our existing assets, together with the contribution from the E.ON assets and the Solan field means that we now expect production for the year to be better than we originally anticipated,” said chief executive Tony Durrant.

“This, along with continued cost savings, positions us well to maximise our current cash flow as we remain focused on managing our balance sheet in the current oil price environment."

In another boost, the company said operating costs in the year-to-date were tracking 10-20% below its budget for the year.

However, Premier’s shares fell initially following the report as investors zoned in on the group’s net debt of £2.68bn amid a slump in oil prices.

At 1617 BST shares recovered, rising 1.10% to 70.52p.