Premier Oil PLC (LON:PMO) told investors that as discussions continue with its lenders it has agreed a further deferral of a debt covenant test.
In a brief stock market statement the exploration and production company said negotiations with the group of lenders “continue to progress well”.
“While these discussions continue Premier has been receiving monthly deferrals in respect of the tests of its financial covenants,” it said.
“Therefore, and as anticipated, the test for the 12 month period ending 31 August 2016 has been waived and replaced by a test for the 12 month period ending 30 September 2016.”
Premier added that it expects it will continue to receive support from the lenders, in regards to the deferrals, and that further monthly waivers will continue if necessary until negotiations conclude.
Interim results, released in August, showed net debt at the end of June amounted to US$2.63bn comprising convertible bonds, UK retail bonds, senior loan notes and bank debt.
Through the negotiations Premier Oil wants to change the medium term covenant profile and agree a reset of debt maturities.
In its financial results statement the group said it expects to conclude the debt negotiations and emerge with revised agreements to be implemented during the second half of this year.
Premier at that time told investors that it ended the first half with some US$800mln of cash and undrawn facilities.
The group also upgraded its production guidance for the full year, following acquisitions and a new field start up in the North Sea. It averaged a production rate of 61,000 barrels oil equivalent in the first half and it is now expected output between 68,000 to 73,000 boepd for the whole year.
It reported interim profit after tax of US$167.1mln, with US$108.7mln of operating cash flow.