Premier Oil reported a pre-tax loss of $829.6million – up from $362.5million the previous year, as it became the latest producer to be hit by the low oil price.
The UK indepedent oil and gas company wrote down the value of its oil and gas assets by just over $1bn while it waits for production from its Solan field development to begin in the North Sea.
Net debt increased to $2.2bn, up from $2.1bn in 2014.
The company has bought UK North Sea assets from E.ON and those – coupled with Solan- will increase production in 2016 to between 65,000 and 70,000 barrels per day.
Revenue fell to $1.06billion from $1.62billion in 2014, with lower production levels in 2015 exacerbating the effect of lower prices.
Higher exploration costs also contributed to the wider loss in the year.
Chief executive Tony Durrant, said: “Despite the significant reduction in oil and gas prices, reflected in our results today, 2015 was a year in which we exceeded production guidance, added to reserves, achieved notable exploration success and reached agreement on a value-adding acquisition.
We also reduced operating costs by over 25 per cent, significantly cut back on current and future development spend and disposed of negative cash flow assets.
Premier said it has 30% of the anticipated production in 2016 hedged at a price of $73.4 per barrel, substantially above the current spot price.
Premier’s other two big development projects, Sea Lion offshore the Falkland Islands and the Catcher project in the UK North Sea, both remain on schedule.
Catcher remains under budget whilst the economics at Sea Lion have been improved.
The company also sold its Norwegian business for $$120 million and the sale of its Pakistan interest is ongoing.
Premier lowered its operating costs by 25% in 2015 and said it will continue to lower costs this year, whilst capital expenditure this year will experience a “significant reduction,” it said.
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