EMBATTLED oil explorer Premier Oil was handed more time to renegotiate its debts arrangements with lenders yesterday, amid the stubborn price rout.
The FTSE 250-listed firm said today that a test of financial covenants for the 12 months ended 31 July had effectively been pushed back by a month. It comes after a similar extension in June, which Premier had said was likely to be extended.
Its shares closed down 7.09 per cent to 59.00p per share this afternoon, however they're still up nearly a quarter since the start of this year.
The company still has access to additional cash through a separate financial agreement to tide it over while the debt negotiations are ongoing.
"Premier's lending group has agreed to a further deferral of the test of Premier's financial covenants while discussions around the company's existing debt arrangements continue," it said today.
"As previously announced, negotiations continue to progress well with agreement of terms targeted for during this quarter. Further deferral of the covenant test date will be sought if required."
Premier has been hit by oil prices which tumbled below $27 per barrel at the start of this year. While unexpected supply outages recently helped crude clear the psychologically important $50 mark, analysts have warned that a glut of oil products is slowing the market recovery.
Low oil prices have helped its debts balloon, and they stood at $2.68bn at the end of April.