Premier Oil blames operational issues as cuts production target

 
Suzie Neuwirth
FTSE 250-listed Premier Oil’s share price fell yesterday, after the oil explorer slashed its full-year production guidance.

Premier reduced its full-year output target down from 63,000 barrels of oil per day (bopd) to 57,000-59,000 bopd, due to operational issues that it said are due to be resolved shortly.

“While our oil production is currently restricted by gas export issues in both Vietnam and the UK, this has limited impact on the long term value of those fields,” said chief executive Simon Lockett.

“Plans are in place to address these issues. In the meantime, we continue to make good progress on our operated development portfolio, on realising value from pre-development assets and on upgrading the potential of our exploration programme.”

Broker Numis said: “The net asset value impact of these production deferrals is small but with production guidance as a tangible measure of a company’s execution and operational management capability this is disappointing.

The firm also said that new debt financings are underway ahead of a principal refinancing due by the first quarter of 2015.

Shares closed down 3.4 per cent.