Thursday 22 August 2019 4:19 pm

Premier Oil prepares to sell Mexican field stake as profits jump

Premier Oil today revealed it would sell a stake in a Mexican offshore field as it chips away at its massive debt.

The company said it was looking to sell part of the Zama field, off the coast of Mexico, alongside its results for the six months ending 30 June.

Read more: Premier Oil approves key project as output slows

The company moved into the black, turning a $24.7m (£20m) pre-tax loss into a $119.9m profit. After-tax profit, meanwhile, grew 23.5 per cent to $121m.

Chief executive Tony Durrant said the company was channelling the money it has made towards paying off its $2.15bn net debt, which was reduced from $2.33bn since 31 December.

It plans to pay off a total of $300m this year.

He also hopes that the sale of Premier’s 25 per cent stake in the Zama field will help reduce the debt pile further.

“Any proceeds will add to debt reduction, that still remains the corporate priority,” Durrant said.

Analysts at Jefferies reckon the stake is worth $439m.

Read more: Premier Oil trims net debt as oil production gathers pace

The company’s earnings before interest, tax, depreciation, depletion, amortisation and exploration expenses (Ebitdax) rose 39 per cent to $680m.

Production hit 84,100 barrels of oil equivalent per day. The company forecasts it will produce between 75,000 and 80,000 barrels per day across the whole year.

Shares rose 6.5 per cent today to 76.96p.