Premier Oil share price rises as it announces refinancing plans are nearing completion

Caitlin Morrison
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Premier has exploration and production operations across the world (Source: Premier Oil)

Premier Oil's share price rose slightly this morning after the group announced that it's in the final stages of talks on its refinancing, and said it is on track to meet production guidance for the year.

The stock was up 0.73 per cent in late morning trading.

The company said it would reach its production target of 68-73,000 barrels of oil equivalent per day.

Premier also said its forecast operating costs of $15.90 (£12.70) per barrel and estimated gross general and administrative costs of $196m are both significantly below budget.

Meanwhile, the group's forecast 2016 exploration and development capital expenditure is expected to be below previous guidance of $730m and 2017 capex is anticipated to be materially lower at $300m.

The group's net debt of $2.8bn at 31 October was "marginally down" from the third quarter.

Premier, one of the oil firms to suffer most from the tumbling oil price of recent years, has been trying to reach a deal with its debtors for months, so news that talks are in their final stages will be a welcome boon to shareholders.

In addition to today's news, the company's fortunes appear to have taken a turn for the better in the last few months: in April, the group bulked up its UK holdings when it bought E.On's North Sea assets, and in July, Premier said the Brexit-induced drop in sterling's value was a positive for the firm.

"Against a challenging commodity price backdrop, Premier continues to deliver operationally," said chief executive Tony Durrant.

"The company is benefitting from a step change in production with a significantly lower cost base while excellent progress has been made on the Catcher project, which remains on track for first oil next year.

"Refinancing of the group's debt has taken longer than anticipated but will, once completed, put Premier in good stead to reinvest in the business while, at the same, time paying down debt."

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