Premier Oil suspends dividend payment due to oil price fall

The group said that it would not be prudent to propose a dividend payment as its focused on preserving cash and maintaining access to liquidity.

The decision follows worse-than-expected results for the full-year, with the previous year's pretax profits of $285.4m turning into losses of $384m in 2014. As a result, earnings per share of 44.2p in 2013 became losses of 40.3p.

However, its sales revenues rose 8.5% to $1.63bn and the company achieved a record annual average production rate of 636,000 barrels of oil equivalent per day, which was better than expectations.

Chief executive Tony Durrant said: "Despite the challenging macroeconomic circumstances, the group delivered record production and operating cashflow in 2014.

"In 2015, we will continue to optimise our stable production base, push forward with approved developments and anticipate adding to our substantial resource base with targeted exploration. This can be achieved while re-setting the cost base to a new low oil price environment."

Durrant continued: "These actions will position Premier as a well-financed low cost producer with significant undeveloped resources and acquisition capacity, highly leveraged to a future recovery in oil prices."

Westhouse analysts said Premier Oil shares have "performed well versus the UK E&P sector in the past few weeks and may pause for breathe here". The broker retained its 'add' recommendation and 171p target price.

Shares were up 1.21% to 176p on Thursday at 10:19.