Premier Oil’s boss said yesterday that the company was in “good shape” to compete for North Sea acquisitions as its finances improve.
Chief executive Tony Durrant said Premier had “operatorship capability” and was well positioned to take on more assets as opportunities arise.
A number of oil majors, including Chevron, are planning to divest their stakes in certain UK North Sea fields.
The situation could play into the hands of Premier, which restructured its finances last year. The London-listed firm is also benefitting from production from the Catcher field, which came on stream in December.
Catcher started consistently producing 60,000 barrels of oil per day in May, Premier said in a trading update.
The firm also revealed that it had completed the £17.3 million sale of its 30% stake in the Esmond Transportation System to CATS Management.
Meanwhile, the company’s board approved the Tolmount southern North Sea gas field development project in June. Its partners on Tolmount are expected to give their blessing in the current quarter. First gas is expected in the fourth quarter of 2020.
Production in the UK slipped by about 10% to 41,100 barrels of oil equivalent (boe) per day in the first half of the year, partly due to planned shutdowns at the Huntington and Solan fields. At group level, full-year production guidance was unchanged at 80-85,000 boe per day.
Net debts at Premier totalled £2 billion at the end of June, down from £2.05bn six months earlier. The company believes it can cut its debts by £225-£300m over the course of 2018.
Mr Durrant said Premier was always alive to the possibility of bolstering its production portfolio.
He said: “If a deal is good enough, we’ll try to find a way to do it. But we will have to see what’s going to come to market. There have been a lot of rumours, so we will have to see how it plays out over the next six to 12 months.”
He added: “Tolmount will give us next the phase of growth and Catcher has done well. It has been a good project.
“So it’s not that we don’t have a growing organisation in Aberdeen, but we’re in good shape to take on more if the possibility arises.”
Alasdair Ronald, senior investment manager at Brewin Dolphin Glasgow, said Premier’s debt reduction efforts would be well received by investors.
Mr Ronald added: “While the company remains positive on prospects for the oil price, it must be remembered that Premier Oil is a leveraged play and the price of oil will be a major factor affecting future profitability.”
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