Premier Oil is hit as North Sea exploration well comes in dry

BRITISH oil explorer Premier Oil said yesterday that its latest exploration well in the North Sea came up dry.

Shares in the FTSE 250 group dropped 4.76 per cent after the company issued a statement saying that it had plugged and abandoned Block 28/10, known as Coaster, as a “dry hole”.

It also said that its Benteng well had come up dry.

However, it announced that another exploration well in Indonesia had made a “small but potentially commercial oil discovery”.

The next exploration well to be drilled by Premier in Asia is the Chim Sao Northwest appraisal well, which is due to spud in July, Premier said.

And it plans to drill its next exploration in the North Sea, the Spaniards East well, in September.

Chief executive Sam Lockett said: “The Coaster and Benteng wells were both assessed as very high risk pre-drill.

“Coaster was an important well to drill, given its proximity to the Catcher licence; but in recognition of the risks we took the precaution of farming-out 50 per cent of our equity on a promoted basis.

“The Benteng-1 results are encouraging as they have established a working petroleum system in a previously unproven basin.”

Last month the group announced that it had bought a 20 per cent stake in licence PL407 and a 40 per cent interest in the adjacent PL406 licence.

This will increase Premier’s stake in the Bream project to 40 per cent, while lifting its interest in PL406 to 80 per cent.

Bream is expected to start producing in 2015 at an initial rate of around 14,000 barrels of oil per day (bopd) net to the group.

Premier Oil’s shares have recently been boosted by the discovery of oil at its Carnaby well in the North Sea.

Premier Oil claims that the oil is “good quality” and similar to the discoveries at its nearby Catcher development.