(Alliance News) - Premier Oil PLC on Wednesday reduced its production guidance and said it is proactively managing the business in "challenging times".
The London-headquartered oil & gas producer said its operations to-date have not been materially hurt by Covid-19. Premier said it has reduced manning levels on all of its installations to ensure continued safe operations and has reduced the scope of its planned shutdowns to include critical maintenance and committed project work only.
The company said its production averaged 70,100 barrels of oil equivalent per day to the end of April, hurt by a recent unplanned shut down at Catcher and the cessation of Huntington production in early April.
Together with the delay to Tolmount first gas, this has resulted in the company revising its full-year production guidance to 65,000 to 70,000 barrels of oil equivalent per day from 70,000 to 75,000 barrels of oil equivalent per day predicted previously.
Turning to project development, Premier said Tolmount - its only sanctioned development project - will add 20,000 to 25,000 barrels of oil equivalent per day to the company's production once on plateau. First gas is now forecast for the second quarter of 2021 due to termination of work caused by Covid-19.
In Mexico, the unitisation of the Zama field and the sales process for Premier's 25% interest in block 7 has been also hurt by Covid-19.
In the Falkland Islands, Premier said it has taken the decision to suspend Sea Lion phase 1 to minimise ongoing spend in light of the current market conditions.
"We continued to generate free cash flow during the period and, based on the current forward curve, expect to be broadly free cash flow neutral for the full year, benefitting from our hedging programme and action taken to reduce our expenditure," said Chief Executive Tony Durrant.
As at the end of April, Premier had unrestricted cash of USD160 million and undrawn facilities of USD330 million. Net debt stood at USD1.91 billion, reduced from USD1.99 billion at year-end 2019.
Premier Oil shares were trading 0.5% lower in London on Wednesday at 26.88 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
