UK independent Premier Oil plans to drill up to 20 wells in its 2012 exploration program targeting 200 million barrels of oil equivalent, the company confirmed Thursday.
Reporting its results for 2011, Premier highlighted an encouraging start to this year with successes in Indonesia and Pakistan. Last year, the firm scored 12 successes among 21 exploration and appraisal wells drilled.
Premier reported a record post-tax profit for 2011 of $171.2 million, compared to $129.8 million in 2010.
The firm achieved this on the back of higher oil prices in 2011, with Brent crude prices averaging $111.30 per barrel compared with $79.50 in 2010. Premier's average production for last year of 40,400 barrels of oil equivalent per day was, in fact, lower than that for 2010 (42,800 boepd), although the firm achieved an exit rate for 2011 of 60,000 boepd.
Premier said that its new projects in Asia contributed to meeting its 60,000 boepd target but, in common, with a number of operators in the North Sea it was adversely affected by unplanned downtime in a number of its UK North Sea fields in early 2011. The firm added that UK production recovered well during the second half of the year and continued into the early months of 2012.
"It remains a top priority for our operations team in Aberdeen not just to maintain production levels, but to ensure the integrity of our production infrastructure as many fields in the North Sea move towards the end of their natural life," said Premier Chairman Mike Welton in a press statement.
For 2012, production guidance is estimated at between 60,000 and 65,000 boepd average with an exit rate of 75,000 boepd, depending on the timing of its first oil and gas from Premier's Huntington and Rochelle projects in the North Sea.
Premier reiterated its near-term goal for exploration is to add another 200 Mmboe to its net 2P reserves by 2015. The company said it is achieving this by focusing on geographies and geological themes in which Premier has demonstrable knowledge, skills and expertise in rift basins of South East Asia, the North Sea and Africa, as well as frontal fold belt provinces such as Premier's asset base in Pakistan.
Since the 200 Mmboe goal was set in 2009, 70 Mmboe of reserves and resources have been added that, with further evaluation and appraisal, could rise to more than 100 Mmboe, said Premier.
Last year, Premier's most notable exploration and appraisal well successes were in the UK Central North Sea and the Nam Con Son Basin in Vietnam.
In Pakistan in 2011, three near-field exploration wells encountered gas in untested fault block compartments within the Kadanwari field area and, in Vietnam, oil was discovered in a previously untested trap immediately northwest of the Chim Sáo field on Block 12W.
This year, Premier reported successes in Indonesia and Pakistan at the beginning of March. Premier reported that its Indonesian WL-5 development well flow tested the Lama Formation within the Anoa Field at a rate of 17 million standard cubic feet of gas per day, while in Pakistan the firm's K-30 exploration well tested gas with a flow rate of 50 Mmscfd.
However, Premier also indicated that the Greater Fyne development in the North Sea does not meet its commercial threshold and will not be progressed following disappointing appraisal drilling earlier this year.
Commenting on the results, London-based investment bank Oriel Securities described them as "solid", noting that Premier's 100,000 boepd mid-term target is achievable. This is based on the firm adding reserves in the North Sea in the Catcher area and also acquiring 60 percent of the equity in the region's Solan field, located west of Shetland.
"Following the booking of 2P reserves at Solan and continued progress on the Catcher area develop, realization of Premier's target of 100,000 boepd in the medium term is becoming much more visible," said the bank's oil sector analysts in a research note.
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