LONDON (Dow Jones Newswires), Aug. 25, 2011
Independent oil and gas company Premier Oil expects production to increase to around 60,000 barrels of oil equivalent a day in the second half of the year as its Chim Sao and Gajah Baru projects come on line in the next few weeks, Chief Executive Simon Lockett told Dow Jones Newswires Thursday.
First-half production averaged 36,900 barrels of oil equivalent a day, down from 46,600 in the first half of 2010 as unplanned maintenance work sapped production. Full-year production is estimated to be between 40,000 and 45,000, similar to levels in 2010.
Premier has put in place a $40 million investment program to minimize future disruptions and some of the work undertaken will actually boost production, Lockett said.
Premier said it expects second-half production to be higher than the first half as the Chim Sao project in Vietnam, which it operates, starts oil production in the next few weeks. This will be supplemented by the start of gas production at the Premier-operated Gajah Baru project in Indonesia.
Lockett said he expects production from Gajah Baru and Chim Sao will "push our production numbers up from the low end that we had in the first half of this year up to 60,0000 barrels [of oil equivalent] a day towards the back end of this year."
"That will keep us on track to deliver 75,000 barrels [of oil equivalent] a day back-end of next year and on to 100,000 barrels a day in the medium term, which is the stated target."
The company is also stepping up its exploration activities and estimates up to 20 exploration and appraisal wells will be drilled in the next 12 months, targeting around 300 million barrels of oil equivalent. It expects to drill 10 exploration wells in the second half of 2011 in Indonesia, Vietnam, Norway and the U.K.
Finance Director Tony Durrant told Dow Jones Newswires that Premier's exploration activities will cost around $250 million over 2011 and estimated that $150 million of that will be spent in the second half.
Premier said it has set itself an exploration target of achieving 200 million barrels of oil equivalent of reserve additions by 2015, of which around 75 million barrels have already been achieved.
Copyright (c) 2011 Dow Jones & Company, Inc.
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