(Alliance News) - Premier Oil PLC swung to a loss in 2020, ahead of its upcoming merger, as it was hit by weak oil prices, the company reported on Thursday.
The upstream oil and gas producer made a pretax loss of USD605.3 million, after a USD102.5 million profit the previous year.
Sales revenue from continuing operations fell by 40% to USD949.4 million from USD1.58 billion, as the average oil price realised by Premier in 2020 after hedging fell by 27% to USD49.4 per barrel from USD68.1 in 2019. The natural gas price realised was 34 pence per therm, down 19% from 42p the year before.
In addition to lower energy prices, Premier achieved less production in 2020. It averaged 61,400 barrels of oil equivalent per day, down from 78,400 in 2019. The company guided 61,000 to 66,000 per day in output in 2021 from Premier's assets alone. It produces from fields in the UK, mainly from the Catcher area off the east coast of Scotland, and in south east Asia.
The London-based company gave an upbeat outlook, though, saying commodity prices are improving and its merger will enable it to pay a "sustainable dividend in the near-term".
Shares were down 1.5% to 29.40 pence in London on Thursday. They remain up 50% so far in 2021.
This was Premier Oil's last earnings report before its reverse takeover by Chrysaor Holdings Ltd, first announced in October. The merger is planned for March 31, before the combined company starts trading in London on April 1 as Harbour Energy PLC.
Chrysaor's own production in 2020 was 173,000 barrels of oil equivalent per day, up from 137,000 in 2019, boosted by assets acquired from US oil company ConocoPhillips. Chrysaor's 2021 production guidance from its assets is 140,000 to 155,000 barrels per day.
By Ivan Edwards; ivanedwards@alliancenews.com
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