North Sea explorer Premier Oil is expected to reveal details of a deal with its lenders over its $2.6billion (£2billion) debt pile later this week.
Premier, the UK’s largest independent oil and gas firm, has been in talks with its lenders – a consortium of around 25 banks – for months as the effects of the oil and gas downturn meant it faced breaching covenants and potentially defaulting on loans.
The firm is expected to unveil details of a restructuring plan on Thursday when it announces its half year results.
Premier has already benefited from waivers by its lenders, announcing last month a deferral of a test of its financial covenants until the end of August.
It is though lenders are looking more favourably at Premier’s prospects as two major North Sea projects come on stream boosting production and its £93million deal to acquire producing assets from Germany’s Eon also floods its coffers.
Its flagship Solan field, which achieved first oil after long delays in April, is expected to be up to full production later this year, while its Catcher play is on track to deliver a peak production rate of 50,000 barrels a day in the third quarter of next year.
Meanwhile, Premier Oil recently said it has slashed investment costs on Catcher by 20% and has achieved average operational costs across its portfolio of $16 per barrel. It is also benefiting from the weak pound which reduces its cost of debt and production compared to dollar-denominated oil and gas sales.
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