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Premier Oil says Catcher field consistently achieves plateau production rate

Premier said group production averaged 76,100 barrels oil equivalent per day over the first half as Catcher ramped up
Premier oil platform
Premier owns a 50% stake in Catcher

Premier Oil PLC (LON:PMO) told investors that its newest oil field, Catcher, has consistently achieved its plateau production rate of 60,000 barrels oil per day.

The 50% field came online with ‘first oil’ in December and this morning’s trading update for the first half of 2018 confirmed its overall group production rate averaged 76,100 barrels oil equivalent per day as Catcher ramped up.

Full year production guidance for the whole of 2018 was repeated, at a range of 80,000 to 85,000 boepd.

READ: Premier Oil is a ‘top pick’ for RBC Capital which eyes production growth

At the same time, Premier noted that Tomount, its next field development project, was approved by its board and formal partner approval is anticipated during the current quarter, meanwhile, in the coming months it also expects to advance the Zama discovery offshore Mexico.

An appraisal programme for the potentially large Mexican discovery is due to get underway in the fourth quarter.

"Catcher delivering stable plateau production is an important milestone for Premier,” said Tony Durrant, Premier chief executive.

“This, coupled with the ongoing strong performance from our underlying portfolio and our continued focus on cost control, will result in significant free cash flow generation and material debt reduction in the second half.  

“We can also look forward to the formal sanction of our high value Tolmount project and the appraisal of our world class Zama discovery, both of which have the potential to deliver significant future growth."

The trading update also detailed a forecast of operating costs for the whole year, which is pitched at US$17 to US$18 per barrel, and it noted that it expects to spend US$380mln (in line with prior guidance) of capital on development, exploration and abandonment in 2018.

Net debt reduced to US$2.65bn by the half year end, and Premier noted that it expects the figure to have reduced by a total of US$300mln to US$400mln over the course of the full year (based on current oil prices). The group’s leverage ratio is forecast to have fallen to 2.5 times earnings (EBITDA) by the end quarter one 2019.

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