Premier Oil announced first-half results Thursday that were judged "solid" by oil sector analysts who follow the company, in spite of the firm posting an operating loss of $167 million for the six month period ended June 30, 2015. The bottom-line result meant that the company moved from a first-half profit to loss, although Premier also made a full-year operating loss last year of $248.1 million.
Premier's loss before tax for 1H 2015 was $214.7 million for 1H 2015 (1H 2014: $50.4 million profit), with net debt at June 30 2015 of $2.09 billion (Dec. 31, 2014: $2.12 billion). Cash flow of $513 million was posted for the first half of this year, which was greater than the firm's cash flow of $499.4 million reported in 1H 2014.
Production averaged 60,400 barrels of oil equivalent per day in 1H 2015, which was a slight decrease on the 1H 2014 figure of 64,900 boepd. Full year production guidance has been maintained at 55,000 boepd and the Solan and Catcher projects are still on track. Solan is scheduled to produce first oil during the fourth quarter of 2015 while Catcher is set for first oil in 2017.
Tony Durrant, Premier Oil chief executive, commented in a company statement:
"First half operating cash flows increased year-on-year driven by reliable production, our hedging program and operating cost savings of 30 percent. With Solan on-stream later this year and Catcher in 2017, we expect both growing production and reduced debt levels. Amended financial covenants announced today provide balance sheet flexibility and demonstrate the on-going support of our capital providers. With the optionality in our portfolio, we are well placed for growth in a stronger oil price environment."
Oil sector analysts at London-based investment bank Westhouse Securities noted that Premier Oil produced "a solid set of results in what has been a challenging period for the E&P sector" and despite thinking that the company's stock has been "oversold on fears of a potential rights issue," analysts believed such an outcome was "very unlikely."
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