Premier Oil Concerned Whether Sevan Can Deliver; Shares Drop

Premier Oil Plc (PMO), a London-based oil explorer, said it’s concerned whether Sevan Marine ASA (SEVAN) is able to deliver a unit to start pumping oil at the U.K. Huntington field in 2012. The shares fell the most in 2 1/2 years.

Huntington’s partners have already begun drilling offshore producing wells, said Chief Executive Officer Simon Lockett. Sevan, which last month received $36.1 million from creditors to stave off bankruptcy, is scheduled to deliver a floating oil- production and storage vessel in the second quarter.

“Frankly, we are still concerned about Sevan’s financial position,” Lockett said in a phone interview. “We are still reliant on Sevan completing pre-financing. But they need more to complete the project. We are anxious to see that they get the project done.”

Premier shares fell 9.7 percent to 316 pence by the 4:30 p.m. close in London, the biggest drop since Jan. 7, 2009.

Premier is relying on Huntington to reach output of 75,000 barrels of oil equivalent a day next year. Its projects in Vietnam and Indonesia, due to start within weeks, will help to raise production to about 60,000 barrels a day by the end of the year, the London-based company said today in a statement.

Gerry Hennigan, an analyst with Goodbody Stockbrokers in Dublin, revised estimates for 2012 production to 67,500 barrels a day. “The uncertainty over Huntington has already led us to pull back our expectations,” he said in an e-mailed report.

First Output

Premier plans to pump first oil at the Chim Sao field in Vietnam next month, Lockett said. Its Indonesian Gajah Baru project is also ready to begin output. Premier extracted 36,900 barrels of oil equivalent a day on average in the first half.

“We are a couple of weeks away for them coming on, which is fantastic,” Lockett said.

The company plans to drill as many as 25 exploration and appraisal wells in Indonesia, Norway, Vietnam and the U.K through 2012. It’s working with partners to pump first oil at the North Sea Catcher development in 2015 and at the Pelican and Naga fields in Indonesia in 2013 or 2014, Lockett said. The company plans to bid for fields in Iraq next year, he said.

Premier’s first-half profit after tax rose 43 percent to a record $88.5 million, the company said in the statement. Revenue fell 6.7 percent to $342.2 million.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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