Premier Oil said on May 16 it is heading for a “material” reduction of its $2.7 billion debt pile, with its Catcher field ramp-up reaching a promised 60,000 barrels per day (bbl/d) as oil prices trade at their highest in more than three years.
In a trading update, Premier reiterated it was on track to meet its full-year production guidance of 80,000 bbl/d to 85,000 bbl/d of oil equivalent.
“We are on track to deliver our plan of material debt reduction in 2018 and 2019 with selective investment in our future growth projects from 2020, once balance sheet strength has been restored,” Tony Durrant, Premier’s CEO, said.
He has said it would be reasonable to expect net debt to fall to about $2.3 billion by the end of the year.
Premier shares were up 2.3% in early trade.
Premier hedges parts of it output to guard against falls in oil prices. It has expanded its hedging for next year to benefit from current high oil prices.
It said it had hedged 21% to 28% of its output through the third-quarter of next year at an average price of $66/bbl to $67/bbl. For this year, it insured 40% of its oil output at $58/bbl to $60/bbl.
After disposing of assets in the North Sea in recent months, a final investment decision for its Tolmount gas field in the southern North Sea is due in the second half of the year, it said.
Premier is also working to start its first appraisal well in the Zama field off Mexico with potential reserves of up to 800 million barrels in the fourth-quarter, while Mexican firm Pemex is in the process of securing a rig for a well in an adjacent block.