Premier Oil seeks UK production growth

“We would aim to continue to participate in the UK North Sea going forward. And it does seem that there are going to be some opportunities coming up in the next six to 12 months to grow the business through acquisition,” Chief Tony Durrant told Reuters in a phone interview.

“It’s going to be biased towards production... We want the cash flow from newly acquired assets,” he said, adding he would expect Premier’s banks to support such a move.

Oil majors such as BP and Total have also shown renewed interest in investing in North Sea assets in recent months as the oil price has rebounded and energy companies recover after slashing production costs following the oil price slump of 2014.

 

In a trading statement on Thursday, Premier said its board had approved its UK North Sea Tolmount project, which will exploit 540 billion ft³ of gas and target peak production of 50 000 boepd.

“Letters of interim agreement (for Tolmount) have been signed with the platform and pipeline contractors and the terminal for onshore gas processing selected. Premier’s board approved the Tolmount project in June and formal sanction by partners is scheduled for the third quarter,” Premier said.

Tolmount and projects in Mexico are crucial to the future growth of Premier’s output, which it reiterated would average 80 000 – 85 000 boepd this year.

The company has been focussing on cutting debt, which stood at US$2.65 billion at the end of last month, down from around US$2.7 billion at the end of last year.