Premier Oil today revealed it recorded profit after tax of $122.6million in 2016.
The number is a significant increase on the previous year’s $1.1billion loss.
Chief executive Tony Durant hinted at the “volatility” the firm has had to weather as it tries to lock-down its re-financing. However, the firm revealed today that it had “entered into lock up agreements with the requisite majority of each of the lenders”.
He said: “Premier has a robust business which continues to deliver excellent operational performance.
“In 2016 we achieved record production, maintained a low operating cost base and completed the highly value adding acquisition of E.ON’s UK upstream portfolio. Significant progress was made on our operated Catcher project which will deliver a further step change in our production levels once on-stream later this year. Our complex refinancing has created uncertainty and volatility but is now nearing completion.
“Looking forward, our strong and growing cash flows will reduce our debt and in due course allow us to invest in new projects to deliver value for all our stakeholders.”
The completion of refinancing expected by end of May.
Last week, the firm reported it had cleared the first hurdle in its refinancing bid, securing the approval of an ad hoc committee.
However, hours later bondholders hit out at the deal.
Today a spokesperson said: “Premier is pleased to announce that it has entered into lock up agreements with the requisite majority of each of the lenders to the RCF, FLS Term Loan and US Private Placement notes (in total 87% by value) to the terms of the proposed refinancing. The lock up agreements, which will become effective once the Schuldschein lock up process has completed, will commit the parties to vote in favour of the amended terms. Currently, nine of the ten holders of the Schuldschein loans have entered into lock up agreements while the remaining holder has recommended the proposed terms to its credit committee and its approval process is underway. Once this holder is locked up, the Schuldschein holders will also be committed to implement the refinancing.
“As a result of the lock up processes, the Group will have the requisite level of support to commence the Scottish Court schemes of arrangement by which the amendments to the terms of the RCF, FLS Term Loan, US Private Placement notes and Retail Bonds will be implemented. The Court schemes will require a vote of more than 75% by value of the RCF, FLS Term Loan, US Private Placement notes and Retail Bonds present and voting. This is more than covered by the value that will be bound under the terms of the lock up agreements referred to above.”
Mr Durrant added: “Based on the support now received, we can look forward to completion of the refinancing. Documentation to shareholders and public bondholders will be issued in due course.”
Separately, the firm hit record production in 2016 increasing 24% to 71.4 kboepd.
Its financial update said E.ON’s UK upstream portfolio was outperforming and payback is now expected in the first half of this year. Its opex is $15/boe.
It has a net debt of $2.8billion and cash and undrawn facilities of $593million
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