Premier Oil's exploration programme on track as firm cuts costs

Premier Oil’s exploration and drilling programme was on track as of 30 April and the firm continued to enjoy significant liquidity.

In a trading statement covering the first four months of 2015 the outfit announced that production had averaged 60,200 barrels of oil equivalent per day (boepd), down from 65,800 in the year-go period.

The company said it was delivering significant and sustainable savings in its operating costs, including through lower general and administrative expenses.

Premier boss Tony Durant highlighted the exploration success achieved in the Falklands and how the firm is trying to lay the operational and financial groundwork so it can benefit the most from the expected recovery in oil prices.

Among the major milestones achieved by its exploration programme, the company made oil and gas discoveries at its Zebedee and Isobel prospects, both of which are located in the Falklands archipelago.

Improved progress was made on the completion and commissioning of its Solan project, with first oil targeted for later this year.

First oil from its Catcher field remains on schedule for 2017.

Full-year production guidance of 55,000 boepd, excluding Solan, was maintained.

Analysts at Numis emphasised how the company's Chima Sao field had outperformed management expectations thanks to high uptime, although that had been offset by restricted production at Huntington which in April resumed full production, providing comfort on the firm's full-year production guidance.

Cash and undrawn facilities stood at $1.3bn at period end.