Premier Oil PLC Trading Update (0221G)
March 13 2020 - 3:00AM
UK Regulatory
TIDMPMO
RNS Number : 0221G
Premier Oil PLC
13 March 2020
Premier Oil plc
("Premier" or the "Group" or the "Company")
Trading update
13 March 2020
Following the announcement of Premier's 2019 Full Year Results
last week, the Group provides the following trading update in light
of the current market volatility.
Premier's assets continue to perform well with production to the
end of February of 76.6 kboepd. Full year production guidance of
70-75 kboepd is reiterated, before the impact of the proposed UK
acquisitions.
Premier has hedged c. 30 per cent of its full year 2020 oil and
gas entitlement production at an average oil equivalent price of
$60/bbl. This includes 40 per cent of the Group's oil production
for the first half of the year hedged at $64/bbl. A full schedule
of the Group's hedging programme is set out at the end of this
statement and is consistent with that released in the Group's 2019
Full Year results.
The Group retains significant liquidity. It has unrestricted
cash of $135m and undrawn facilities of c.$330m, as at the end of
February. Premier's 2020 cash flow breakeven price is under $50/bbl
and a $5/bbl move in the oil price point forward is expected to
result in a c.$50m move in free cash flow on a full year basis.
This includes the benefits of the hedging programme and is based on
capex guidance of $470m and new operating cost (including leases)
guidance of c. $20/boe. As well as maintaining liquidity, Premier
is focused on managing its forward covenant position which could be
impacted by ongoing oil price weakness.
Discussions are already underway regarding the Group's ability
to reduce its 2020 capex programme. Initial analysis suggests that
at least $100m of savings and deferrals is achievable with
potential for further reductions. Assuming a $100m reduction in
planned 2020 capex and $35/bbl oil price for the remainder of the
year, the Group would expect to be broadly cash flow neutral in
2020. This does not take into account positive cash flows from the
proposed UK acquisitions or potential disposal proceeds.
With regards to the proposed acquisitions and extension to the
Group's credit facilities, the court hearing to sanction the
creditor schemes of arrangement is scheduled to commence on 17
March. Premier will provide an update on the next steps in the
process once the sanction hearing has taken place.
Enquiries
Premier Oil plc Tel: 020 7730 1111
Tony Durrant, CEO; Richard Rose, Finance Director
Camarco Tel: 020 3757 4983
Billy Clegg; James Crothers
The information contained within this announcement is deemed by
Premier to constitute inside information as stipulated under the
Market Abuse Regulation. By the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain. The person responsible
for arranging for the release of this announcement on behalf of
Premier is Andy Gibb (General Counsel).
Hedging schedules
Oil
2020 1H 2020 2H
% of forecast ent. production 40 14
-------- --------
Average price ($/bbl) 64 63
-------- --------
UK gas
2020 2021 2022
% of forecast production
hedged 37 16 9
----- ----- -----
Average price (p/therm) 54 42 42
----- ----- -----
Indonesia gas
Premier has hedged 48% of its 2020 Indonesian entitlement gas
production at an equivalent price of c. $9/mscf.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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