* Had sought 2.5-year debt extension, now 4-5 years -CEO
* Raises 2020 outlook to free cash flow positive
* Expects $300-$500 mln H1 non-cash impairment
* Shares down 2.9% in early trade
(Adds detail on impairment)
By Shadia Nasralla
LONDON, July 15 (Reuters) - North Sea-focused Premier Oil
is seeking a four-to-five year extension to debt due
next year, about twice as long as first envisaged, its CEO said
on Wednesday.
The oil and gas producer's net debt stood at $1.97 billion
at end-June, little changed from December, while its market
capitalisation stands at about $524 million.
"We continue to have pretty productive discussions with
creditors. We're close, I would say, to final termsheets on
that. We agreed a timetable with them for the end of July," CEO
Tony Durrant told Reuters.
"What we've actually been discussing - it's not completely
finalised yet - is a rather longer extension... The range we're
talking about is more like four to five years (from 2021)."
Premier also said it expects to book a $300-$500 million
non-cash impairment at its first-half results due on Aug. 20 due
to lower oil price expectations.
Premier shares were down around 2.9% at 44 pence at 0920 GMT
versus an oil and gas companies index up 0.8%.
"The Group now expects to be free cash flow positive (after
interest) for full year 2020 based on the current forward
curve," Premier said in a trading statement.
In May, Premier had said it expected to be cash flow neutral
this year. It has hedged just over a fifth of its second-half
output at around $56 a barrel of oil equivalent.
Durrant said the group's cash flow would rise by $30 million
for each $5 increase in benchmark oil prices, which
currently stand at around $43 a barrel, above its break-even
price of $32 per barrel.
He said the company sees long-term oil prices at $60-65 a
barrel.
Premier expects output of between 65,000 and 70,000 barrels
of oil equivalent per day (boepd) this year.
It expects its output to rise by 17,000 boepd from September
after BP sweetened the sale of some of its North Sea
fields to Premier last month.
Further growth is expected from the British Solan field at
10,000 boepd later this year and another 20,000 boepd when its
Tolmount gas project comes online in the second quarter of next
year.
(Reporting by Shadia Nasralla; editing by Jason Neely and
Barbara Lewis)
