Shares in North Sea oil giant Premier Oil were up 1.6 per cent at 139p in early trading, despite a trading update showing falling oil prices and lower production had hit the company hard, with first-half results posted in August expected to show revenues fell 34 per cent to $580m (£377m) in the six months to the end of June.
Production was down 21 per cent in the UK, to 16,800 barrels a day, while global production was down 7.8 per cent.
The FTSE 250-listed company’s net debt was flat at $2.1bn.
Why it’s interesting
Oil prices have fallen by half in the past year, with global benchmark Brent crude recently trading below $60 for the first time since April.
This is reflected in Premier Oil’s falling revenue and share price, which has dropped 60 per cent over the year.
The oil company had invested heavily in the North Sea, but has sold off Scott area assets and focus will be shifted back to the Falkland Islands, where several exploration projects are already underway.
What they said
Tony Durrant, chief executive:
We have remained focused on minimising our cost base with forecast full year operating expenditure below our already considerably reduced budgets. Consequently, net debt during the first half has remained flat despite our continuing investment programme.
We remain well-placed to generate long term cash flows to fund both our committed developments and to manage our balance sheet, even in a sustained low oil price environment.
A challenging oil market is causing trouble for Premier Oil, reflected in falling revenue and production.