Premier Oil: completion of the Babbage Area sale & operations update

Premier has received £30.3 million (US$38.7 million), after adjustments for Babbage cash flows collected by Premier since the effective date of 1 January 2018. In addition, Verus will take on exploration commitments valued at c. US$24 million. Production from Babbage has averaged 2.5 thousand boe/d year to date.

The sale proceeds will be used to pay down the company’s existing debt.

Production update

Group production year to date has averaged 79.4 thousand boe/d. Production in November and December to date was above forecast at 92 thousand boe/d with a record daily production rate of 98.7 thousand boe/d achieved on 4 December. This strong production performance has been driven by high uptime across the Group’s producing portfolio, including at Premier’s operated Catcher Area which has averaged 68 thousand boe/d (gross, Premier 50%) in November and December to date.

Premier continues to forecast full year production of around 80 thousand boe/d.

Premier has hedged over 30% of its 2019 forecast oil entitlement production at an average price of US$70/bbl, as per previous disclosure.

Mexico update

On 29 November, the Ensco-8503 rig spudded the Zama-2 appraisal well, the first of the two well Block 7 Zama appraisal programme. The well will aim to confirm the oil water contact and is expected to reach the reservoir early in the New Year.

Sierra Oil & Gas, Premier’s 40% partner in the Block 7 Zama discovery, announced on 4 December that it is to be acquired by DEA Deutsche Erdoel AG (DEA). DEA is also the operator and Premier’s 40% partner in Block 30, which contains the high impact Wahoo and Cabrilla prospects, with 3D seismic acquisition planned for 2019.

Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/10122018/premier-oil-completion-of-the-babbage-area-sale-operations-update/