Premier Oil pumps up oil production and cuts costs in the first half

Courtney Goldsmith
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Premier Oil yesterday announced a huge oil find offshore Mexico (Source: Getty)

Premier Oil ramped up production and reduced costs in the first half of the year as it looked towards new growth opportunities.

The oil explorer's production soared 34.2 per cent compared with the previous year to 82,100 barrels of oil equivalent per day (boepd), the firm said in a trading update for the six month ended 30 June.

Premier maintained its full-year production guidance of 75,000 boepd for now, but it will hold a review after the summer maintenance period. Analysts expect the company to increase its guidance.

The firm reduced its operation costs by 11 per cent to $14.70 (£11.37) per boe and dropped capital expenditure guidance by $25m to $325m.

Premier reduced net debt by $2.7bn in the first half and confirmed positive cash flow.

The company's share price fell 2.4 per cent to 61p in morning trading after yesterday jumping more than 30 per cent following the announcement of a "world class" oil discovery offshore Mexico.

"The very exciting exploration success in Mexico comes on top of another strong operating performance for Premier in the first half," said Tony Durrant, the boss of Premier.

"Our substantial undeveloped resource base, now enhanced by the Mexican discovery, provides Premier with significant growth opportunities."

The company's long-awaited refinancing package is expected to become effective 28 July as all shareholder and lender approvals have been received. The final court scheme sanction hearing is scheduled for 18 July.

Read more: Premier Oil increases its stake in Britain's biggest onshore oil field

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