Premier Oil upgrades 2016 output forecast. Cuts Catcher capex
Premier Oil, and UK-based oil company, is set to break its 2016 production guidance ceiling.
In its trading update on Wednesday, Premier Oil said that strong production to April 30, of 57.3 thousands of barrels of oil equivalent per day put the company on track to deliver at or above upper end of 2016 guidance of 65-70 kboepd for the full year.
To remind, the company in April kicked off production from its Solan field in the North Sea, and it also completed the acquisition of the UK North Sea assets from E.ON from $120 million.
Tony Durrant, Chief Executive, said: “Strong production performance from our existing assets, together with the contribution from the E.ON assets and the Solan field means that we now expect production for the year to be better than we originally anticipated. This, along with continued cost savings, positions us well to maximize our current cash flow as we remain focused on managing our balance sheet in the current oil price environment.”
Premier also said that its Catcher field development remains on track to deliver first oil in the second half of 2017. The company said that the UK North Sea project was progressing under budget, with forecast gross capex to first oil is now anticipated to be around $1.35 billion, a reduction of 15 per cent below that original sanctioned.
The oil firm said the cost cuts came from reductions negotiated on contracts, the release of contingencies as work programs are completed, and the re-phasing of some contractor payments and work scopes, given the good progress made to date in the subsea installation campaign and the drilling results.
Premier received the approval for the development of the Catcher area in June 2014. The project includes the drilling of 22 subsea wells on the Catcher, Varadero and Burgman fields which will be tied back to a leased FPSO. The oil will be offloaded by tankers while the gas will be exported through the SEGAL facilities.
In the operational update on Wednesday, the company said that the delivery of the FPSO hull to Singapore is expected by July and “progress in manufacturing of the topside units has been good.”
To remind, there had been reports in 2015 that the FPSO hull construction had been lagging, but this seems to have been rectified now.
Premier has said that following integration and commissioning, the sail-away date of the FPSO from Singapore for a 2017 field start up remains on track. Once online, Catcher is expected to produce 96 million barrels of oil equivalent with a peak production rate of around 50,000 barrels of oil per day.
Offshore Energy Today Staff