The oil firm, which started-up the Catcher field in late December, confirmed that its full year production measured 75,000 barrels oil equivalent per day, which was up 5% from last year and was in line with guidance. Revenue for the year is anticipated at around US$1.09bn, up from US$983mln in the preceding year.
At Catcher, output presently measured around 20,000 bopd and ramping up to a rate of 60,000 bopd, targeted in the first half of this year.
Overall, the group is forecasting production between 80,000 to 85,000 boepd, with the range allowing for the Catcher ramp-up and the anticipated asset disposals that were agreed in 2017.
A “highly successful” year completed
"First oil from Catcher and the completion of the Wytch Farm disposal completed a highly successful year for Premier which included our world class exploration success with the Zama discovery,” said Tony Durrant, Premier Oil chief executive.
“As Catcher builds up to 60,000 bopd, 2018 will bring higher production and cashflow, continuing the debt reduction programme. Alongside this, our portfolio of future projects is being progressed for selective investment and further growth."
Premier also updated investors on its key development projects. Notably, the company said it expects to sanction the Tolmount field development during the year.
The company added that commercial and financial work streams are underway for the Sea Lion field in the Falklands. It noted that the final draft of the field development plan for the project in November, and it is expected that a public consultation for the environmental impact statement is due to start shortly. Meanwhile, talks are underway with potential contractors for a range of services.
Elsewhere, in Mexico, the new Zama discovery is due to be appraised during the 2018/19 season.
Premier told investors that development and exploration capex is anticipated to be around US$300mln. Opex is pitched between US$17 to US$18 per barrel. It is expected that debt reduction will accelerate as production from Catcher ramps up. At the end of December, net debt amounted to US$2.7bn.
City analysts upbeat on trading update
In a note, Jefferies analyst Nathan Piper said: “Higher production from Catcher should outweigh any disappointment on YE17 net debt with growing hedge position locking in H2/18 weighted deleveraging.
“Commissioning of the gas processing plant should be complete end January to allow further production increases from the Varadero and Burgman fields.”
He added: “Premier ended 2017 with net debt of $2.7bn ($2.8bn YE16), slightly below our $2.6bn, due to the timing of liftings across the portfolio moving to 2018.”
Elsewhere, Royal Bank of Canada analyst Mark Wilson added: “Catcher field ramp-up is ahead of expectations. Reaching its plateau target during 1H18 appears well on track and this news more than compensates for lower deleverage during 2017 than expected.
“The potential for the stock to continue to re-rate on fundamental operational progress remains best in class.”