North Sea tax break is bonus for Premier

City A.M. Reporter
BRITISH oil explorer Premier Oil said it will benefit from new tax breaks unveiled in the Budget which will enable it to expand operations and target acquisitions.

The company said annual profit after tax jumped 32 per cent to $171.2m (£108.3m) beating a consensus forecast of $165m from a company-supplied poll of analysts.

Premier reiterated its average production target of between 60,000 barrels of oil equivalent per day (boepd) and 65,000 boepd for 2012, 50 per cent higher than in 2011, as new projects come onstream in the North Sea.

“Big thumbs up from us. I couldn’t have wished for a better result,” chief executive Simon Lockett said of the expansion in the small field allowance announced by chancellor George Osborne on Wednesday.

In the North Sea Premier’s Solan oil field and three fields within the Catcher area will all benefit from the new measures, Lockett said.

Premier said it had cash and undrawn bank facilities of around $1.4bn in early 2012, giving it the firepower to make acquisitions and explore for oil in new areas.

It said Kenya would be a key territory in the future.

“Based on our initial evaluation the small field allowance changes are worth over $100m net to Premier,” said Oriel Securities analyst Nick Copeman.