The following statement was made by Simon Lockett, Chief Executive of Premier Oil plc, at today's Annual General Meeting of the Company:
"Irrespective of the strong oil price environment, 2007 was an excellent year for Premier. Major achievements were made advancing our development projects both commercially and technically. We signed significant Gas Sales Agreements with customers in Singapore and Indonesia, and continue to be on track with our stated aim: producing 50,000 barrels of oil equivalent, per day, by the end of 2010. In line with this aim, the company's average production rate increased by 8% to 35,800 barrels of oil equivalent per day, and in the early part of 2008 exceeded 40,000 barrels per day.
This year will see Premier drilling a total of 12 exploration and appraisal wells. The program has begun well with the successful appraisal of the Chim Sao field in Vietnam and in Mauritania with the successful Banda well.
In 2007 we completed two growth acquisitions in our core areas. In the North Sea, we acquired a further 20% equity in the producing Scott field adding around 5,000 barrels of oil equivalent per day to Premier's current production rate. In Asia, we increased our equity in North Sumatra Block A by 25%. These acquisitions added barrels to Premier's booked reserves and represented extremely good value, even more so in a rising oil and gas price environment.
Between year-end 2006 and 2007, oil and gas reserves increased by 39%, to 212 million barrels of oil equivalent. We also added 20 million barrels of oil equivalent to our contingent resources. It is particularly pleasing to transfer exploration success into gas reserves from our Indonesian Natuna Sea project with the signing of Gas Sales Agreements.
Financially, Premier is in an extremely strong position. The balance sheet at the end of April 2008 had around 425 million dollars of cash. With hindsight, and given the current credit environment, our decision to issue a $250 million convertible bond in May 2007 at a coupon rate of only 2.875% was extremely astute. Along with our undrawn bank facilities and our strong operating cashflow, this means that our $1 billion dollar capital program is fully funded."
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