Premier: Catcher, Solan Projects Back 'On Track'

Premier Oil reported Thursday that its Catcher and Solan field developments in the North Sea are back on schedule.

In a third-quarter trading update, Premier said that the Solan oilfield is on track to produce its first oil before the end of this year. Solan, located West of Shetland, was originally scheduled to begin production by the start of 2015, but delays in the commissioning of production facilities took longer than expected due to poor weather and low productivity. The field is expected to reach plateau production of between 20,000 and 25,000 barrels of oil equivalent per day.

Premier said the Catcher project remains on schedule and on budget after the completion of a successful subsea program in 2015. The firm added that results from initial development drilling had been "encouraging".

Meanwhile, the company confirmed that pre-FEED work on its Sea Lion project near the Falkland Islands in the South Atlantic has been completed and that it has selected contractors to begin field development work. Premier, which said that progress has been made on FPSO and Subsea System designs for Sea Lion, will provide a full update on the project during the first quarter of 2016.

Premier also said that it has made progress with its Vette project in Norway as well as with planned next-generation developments at its Natuna Sea Block A in Indonesia.

In its exploration activities, the firm noted that its four-well North Falklands Basin campaign had a strong start early this year with discoveries from the first two wells. It expects further drilling results from the Falklands early next year.

Premier reported production for the 10-months period to October 31 averaged 57,500 barrels of oil equivalent per day, compared to 64,000 boepd during 2014.

Premier Chief Executive Tony Durrant commented in a company statement:

"Premier continues to benefit from stable production and valuable hedging contracts. Commissioning on the Solan project progressed well during good autumn weather and the field remains on track for first oil by year-end. The Catcher project is on schedule and on budget. Looking ahead, we see reduced capital expenditure and significant cost reductions for both our current and future projects to mitigate the current oil price environment."

Oil sector analysts at investment bank FirstEnergy said that they do not anticipate Solan to contribute to Premier's production in 2015. However, they also noted that Premier's production figures so far for 2015 were ahead of their expectations.



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