Premier has provided its Interim Management Statement as required by the UK Listing Authority's Disclosure and Transparency Rules. This statement relates to the period from July 1, 2008.
Simon Lockett, Chief Executive, commented, "We continue to see good progress on our key development projects which will drive underlying growth. Our 2009 exploration programme provides material upside. In the
Recent production data reflects strong performance from the Anoa field in Indonesia and the Wytch Farm and Kyle oil fields in the UK. Demand for gas from our Pakistan fields remains strong.
A number of initiatives are under way to maintain output from our portfolio of producing fields into 2009.
A four-well work over program has added 300 bopd (net) to Anoa oil production in 2008. The plan for 2009 includes two workovers on the Eastern Lobe structure, three new gas producing wells on the West Lobe structure and a horizontal oil development well in an unexploited fault block. In total, the program is targeting an additional 100 BBtud of gas deliverability and up to 2,000 bopd (gross). On the Kakap field, new subsea tie-ins are planned, including the Lukah discovery.
Incremental gas from the enhanced gas capacity project on Qadirpur is expected before the end of the year and should facilitate a further 800 boepd (net) of production. The 2009 program includes a further five development wells.
The field development drilling program is under way on Kadanwari. The K-17 well completion is in progress. A further three wells are planned for 2009 including the K-19 and K-22 exploration wells.
A program of two development wells is under way at Bhit; the Bhit-12 well is currently being logged. This will be followed by the Bhit-10 well in December. Commissioning of Phase 2 is under way on Zamzama to take the plant to full capacity of 150 mmscfd. Infill well drilling has commenced with a well spudded early in November
An infill drilling program of four wells has commenced on the Scott field and, together with operational improvements, is expected to add approximately 800 bopd (net) to production in 2009. On Wytch Farm, seven well workovers and two infill wells are planned for 2009.
The intervention and drilling program on the Chinguetti field completed in October. The current production rate, including production from the CH 19 and CH 20 wells is around 17,100 bopd (gross).
In October Premier announced the signing of the fully-termed Gas Transportation Agreement for gas deliveries from Indonesia to Singapore, providing contractual rights to transport gas. This agreement was a condition of the Gas Sales Agreement signed earlier in the year. Further Gas Transportation Agreements for the gas deliveries to the two Batam gas customers are expected by year end.
The majority of long lead items are now committed and EPCI award is expected before year-end. First gas is targeted for the fourth quarter of 2010.
North Sumatra Block A - Alur Siwah and Alur Rambong
FEED studies commenced in July and are expected to complete by year-end. The joint venture is in discussions with Indonesian government authorities regarding the profitshare split and gas price – the net economic impact is expected to be neutral. The drilling rig tendering process for 2009 development drilling is under way.
Deliveries to PLN, the Indonesian state electricity company, are scheduled to commence in 2010, with deliveries to the PIM fertilizer plant expected to commence in mid-2011.
A Heads of Agreement between the Block A partnership and the neighboring Block B joint venture partners, to allow gas to be transported to customers through the Arun pipeline infrastructure, is expected to be signed shortly.
A well work over program is under way on the Tualang and Iee Tabeue oil fields with a rig having arrived on location earlier this month, following site and access reclamation and preparation.
The final field development plan has been submitted, and final Vietnamese government approval has now been received. In August the development moved into the execution phase under Interim Agreements awarded to the FPSO and EPCI contractors – design work commenced and steel plate cutting began at the fabrication yards. The gas offtake Heads of Agreement has been initialed in readiness for full execution concurrent with project sanction, expected imminently. The project remains on target for first oil in 2010.
The Plan of Development for Froy was submitted in September to the Ministry of Petroleum and Energy in Norway. Whilst this is being reviewed, Premier is working closely with the operator and the main contractor to optimise the potential development in light of the lower oil prices and the potentially lower cost environment.
Exploration and Appraisal
An appraisal well on Banda East spudded in October and intersected an 86 meter gross gas column and a 19 metre gross oil column with 29 meters of net reservoir sand. A drill stem test is being planned. This is the second appraisal well drilled on the Banda gas field this year. The operator is targeting a decision on commerciality in the first half of 2009.
Testing of the 2007 Qadirpur-Deep discovery is under way. First results are expected towards the end of November.
Following the recent Al Amir SE discovery, the rig has successfully drilled a sidetrack to the 2004 Al Amir-1 discovery well as a future producer. An appraisal well on the Al Amir SE discovery is also planned.
At this stage, nine wells are confirmed for 2009 with a further seven wells in the planning stage. Timing of these additional wells in Vietnam, Indonesia, Norway and the Congo is dependent on rig slots and preceding third party programs.
A 2D acquisition survey on Block 07/03 completed in September and geological and geophysical evaluation of the block is ongoing. The Hakuryu V is anticipated to arrive on location in May 2009 and to return for a second well around year-end.
Re-processing of 2,700km of 2D data on Block 104-109/5 started in September and is due to complete in January 2009. Geological and geophysical evaluation in also in progress. Tender of the 2009 3D survey has been finalized and bids are expected later in the month.
The 2D seismic program on Tuna was completed in October. The rig contract for a two-well drilling program on the block is still subject to government and partner approvals.
A well is planned to be drilled in the second quarter of 2009 to target the Lama formation beneath the producing Anoa field. The Lama formation has not been drilled on Natuna Sea Block A to date, but oil has been discovered in this formation on the neighboring Kakap block. A successful result would open up a new exploration play across much of Natuna Sea Block A.
Seismic and other studies on the Buton block are under way; seismic acquisition is scheduled to complete by the beginning of 2009.
A contract has been signed with Transocean for the Aleutian Key deepwater rig to drill the 170 mmbbl Frida prospect. The anticipated spud date is third quarter 2009.
Confirmation of timing of a rig slot for the neighbouring Ida prospect is expected before year-end.
The operator currently estimates that the Bream appraisal well will be spudded in the second quarter of 2009 subject to securing government approvals for the planned rig. The Greater Luno well on Block 16/4, targeting an analogous structure to Lundin's Luno discovery immediately to the north on Block 16/1, will now spud in the third quarter of 2009.
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