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Premier Oil releases 2019 full year results

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Oilfield Technology,

Premier Oil has announced its 2019 full year financial results.

Financial highlights

  • Increased profit after tax of US$164 million (2018: US$133 million)
  • Record free cash flow of US$327 million (2018: US$251 million); US$31/bbl cash margin (2018: US$26/bbl)
  • EBITDAX increased to US$1230 million (2018: US$1091 million, adjusted for the impact of IFRS16)
  • 2019 expenditure (OPEX of US$11/boe, total CAPEX of US$273 million) below guidance
  • Net debt reduced to US$1.99 billion (2018: US$2.33 billion) and covenant leverage ratio to 2.3x (2018: 3.1x)
  • Free cash flow generation forecast for 2020, driving continued debt reduction

Operational highlights

  • Production of 78 400 boe/d, at upper end of guidance; 2020 guidance of 70 000 -75 000 boe/d (before any contribution from the announced UK acquisitions)
  • Catcher (UK) project payback reached; Catcher North and Laverda developments sanctioned
  • BIG-P (Indonesia) first gas delivered on schedule and below budget
  • Tolmount (UK) on track for first gas by year-end 2020, adding 20 000 -25 000 boe/d (net, Premier 50%); Tolmount East development planning underway targeting 2H20 sanction
  • Positive Zama (Mexico) appraisal campaign; unitisation and sales process underway
  • Heads of Terms signed for Sea Lion (Falkland Islands) and Tuna (Indonesia) farm downs
  • Accretive and strategic UK acquisitions, underwritten financing and proposed extension of credit facilities announced; court sanction hearing scheduled for 17-20 March 2020
  • New prospective acreage captured in Alaska and Indonesia; high value near-term E&A wells planned with Charlie-1 (Alaska) drilling ahead and Berimbau/Maraca (Brazil) to spud in 3Q20

Tony Durrant, CEO, commented: “Premier made significant progress against its strategic targets during 2019. Strong operational performance resulted in record free cash flows and reducing debt levels. We took material steps to commercialise our reserve and resource base and added to our exploration acreage position. The proposed acquisitions will add material cash-generative UK production. Premier is committed to being a responsible operator and today announces that all operated projects will be developed on a net zero emissions basis.”

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