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Premier Oil upgrades guidance as production growth continues

Output for 2019 is now anticipated at 75,000 to 80,000 barrels a day
oil and gas operations
The Tolmount and Zama growth projects will provide drill catalysts

Premier Oil PLC (LON:PMO) has upgraded its production guidance after year-to-date output rose 14% compared with the same period last year.

Production since the start of 2019 has averaged 85,100 barrels oil equivalent per day, the company revealed.

The oiler has now pitched its full-year production guidance at 75,000 to 80,000 boepd, extending the top of the range from 75,000 boepd.

READ: Premier Oil enjoys appraisal success with Zama offshore Mexico

Cost guidance, meanwhile, remains unchanged – with operating expenditure anticipated at US$13 per barrel and the capital budget seen at US$340mln.

Net debt presently stands at around US$2.25bn and the company is forecasting that it will be reduced by US$250-350mln over 2019, based on current oil prices.

"We continue to deliver ahead of plan,” said Tony Durrant, Premier chief executive.

“Production and free cash flow are ahead of forecast for 2019 and, consequently, we are reducing our debt faster than anticipated. 

He added: “At the same time, we are making good progress on our growth projects. 

“We look forward to concluding the Zama appraisal campaign and to spudding Tolmount East, which has the potential to deliver a step change in value to the already high return Tolmount Main project."

Tolmount

The Tolmount project is the next significant growth project in the pipeline. It is progressing on schedule and on budget, Premier said. It is 50% owned by Premier and will yield some 58,000 boepd once production reaches the peak rate. First gas from Tolmount is anticipated in 2020.

A new appraisal well is due to test the Tolmount East resource area in July.

Meanwhile, in Mexico, the company expects to complete an appraisal programme on the Zama discovery in June. Results from the high profile discovery will likely be a key point of focus for investors.

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