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By Shadia Nasralla
LONDON, May 13 (Reuters) - Oil and gas producer Premier Oil
said on Wednesday that it expects to be free cash flow
neutral this year due to weak oil prices, adding it would engage
with stakeholders over extending debt maturities and raising
equity.
Premier has hedged 30% of its 2020 production at $60 a
barrel. Net debt stood at $1.91 billion at the end of April.
"In light of the ongoing weak oil price environment, Premier
has entered discussions with its lending group to address its
covenant profile with a view to securing any necessary waivers,"
Premier said referring to commitments attached to its debt
repayments which undergo regular tests by banks.
Proposed acquisitions include oil major BP's stake in
the Andrew and Shearwater fields and an increased stake for
Premier in the Tolmount gas project for $625 million and $191
million, respectively. This is also predicated on a capital
raise of at least $350 million.
A court last month approved a scheme of arrangement between
Premier and its creditors to postpone its debt maturities by
over two years to late 2023, but one debt holder, hedge fund
ARCM, appealed against the plan, holding up any further moves
until the appeal is resolved.
Premier is also expected to ask BP for a lower price for the
assets, according to industry sources. Premier has $160 million
of unrestricted cash and $330 million of undrawn debt
facilities.
(Reporting by Shadia Nasralla; editing by Louise Heavens)
