Premier Oil confident in reducing debt; begins drilling in Mexico
Premier Oil said it expected full-year production to come in at the low end of a previously announced 80,000 to 85,000 barrels per day range. The company, with interests in the Falkland Islands and which has been focusing on cutting debts, also said its debt pile would shrink to US$ 2.4 billion by the year-end.
Premier’s debt reduction this year was broadly in line with its target of US$ 300-400 million and Chief Executive Tony Durrant told Reuters he saw net debt reduction next year in that range as well.
When asked when Premier might reinstate dividends, Durrant said net debt below US$ 2 billion would feel “comfortable” but that payouts would have to be weighed against investment in growth in Mexico, the Falkland Islands and Indonesia. The company has not paid dividends since 2014.
Premier is starting drilling later this month to appraise its resources in Mexico’s huge Zama field and expects results on the extent and depth of the reservoir as well as flow test data in around a hundred days, Durrant said.
”Premier remains our preferred Brent oil price play providing leverage to strong oil prices through debt reduction and accelerated use of UK tax losses,” RBC said in a note.
Premier has hedged around 30% of its output at a price of US$ 69.1 per barrel for the first half of next year and US$ 72 per barrel for the second half, it said.