Production running ahead of guidance, Premier Oil says

Premier Oil, an independent exploration and production company, has reported that its daily production rate is above its full year guidance. 

According to the company, its production year-to-date has averaged 57.1 kboepd.

Summer maintenance activities have been completed and production has returned to previous levels, the company noted. As a result, production remains ahead of full year guidance of 55 kboepd, before any contribution from Solan project, in the UK North Sea.

Premier has hedged approximately 60 per cent of its 2015 2H liquids production at $92/bbl and 30 per cent of its expected liquids production in 2016 at $68/bbl. Premier will continue to seek to add to this position as market conditions allow. As a result of significant cost savings, Premier continues to expect full year opex of c. $16/boe.

Premier anticipates first oil from Solan in Q4 2015, as previously guided. According to Premier’s statement, good offshore productivity and 97 per cent uptime has been achieved with the Regalia flotel. A number of the critical path platform systems have now been commissioned including the firewater deluge system and other safety related systems such as the gas detection system, the company said. 34,000 hours of planned commissioning activity remains to first oil (down from 56,000 hours at the time of the company’s Half-Yearly Results in August) and these are being liquidated at a rate of 600-800 hours per day. Completion of the commissioning of the subsea infrastructure is also progressing well, the company reported.

Premier’s 2015 full year capex guidance is unchanged and Premier continues to forecast a significant reduction in year-on-year capex in 2016.

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