Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Premier Oil Expands From Falkland to Cyprus on Rising Cash Flow

Aug. 23 (Bloomberg) -- Premier Oil Plc, a U.K. explorer with North Sea and Southeast Asian fields, is expanding projects with record cash flow and plans to double its production in the medium term.

Premier has been securing new exploration assets in Kenya, Iraq and the Falkland Islands and is bidding for fields off Cyprus. It plans to invest between $1.2 billion and $1.5 billion in projects a year until 2017, said Premier Chief Financial Officer Tony Durrant. Cash flow will rise from $1 billion next year to $2.5 billion in 2016, when the U.K. Catcher field comes on stream, he said.

“Rapidly our cash flow is overtaking our capital expenditure,” Durrant said in a phone interview.

First-half operating cash flow rose 34 percent to $325.5 million, London-based company said today in a statement. It expects to raise extraction to 75,000 barrels of oil equivalent a day once the Huntington and Rochelle fields come online at the end of the year. Output will further rise to 100,000 barrels in the medium term, up from 40,400 barrels a day pumped last year.

“We have a lot of activity on all fronts, which is really about maintaining the momentum that we have created over the last couple of years to carry on the growth pattern,” said Chief Executive Officer Simon Lockett.

Premier plans to drill “three very important wells” in Norway, the U.K. and Vietnam in the next six months, the CEO said in a phone interview. “What we have been doing is making sure we’ve got the right exploration portfolio core beyond 2013.”

Developing Plans

Premier is developing plans for its $5 billion project off the Falkland Islands after it agreed to join Rockhopper Exploration Plc’s Sea Lion field. The political situation around the disputed archipelago is improving with the U.S.’s Noble Energy Inc. and French government-supported Electricite de France SA stepping in to explore for oil, Durrant said.

“It’s not such a bad combination now,” the CFO said.

Oil discoveries around the Falklands have inflamed tensions between the U.K. and Argentina, which maintains a claim on the territory after losing a war with Britain about three decades ago. The Latin American nation in July warned Premier of illegal exploration around the disputed territory.

In the U.K., Premier has teamed up with ConocoPhillips to drill the high-pressure, high-temperature Lacewing well. In Iraq, it agreed to work with Russia’s OAO Bashneft in Block 12.

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

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.