Premier Oil Plc, a U.K. energy explorer operating from the U.K. to Southeast Asia, said delays in starting North Sea fields will hold back production in 2013.
The EON SE-led Huntington and Nexen Inc.-operated Rochelle fields will start in the first quarter rather than at the end of this year as previously forecast, Premier said in a statement. It expects to pump as much as 70,000 barrels of oil equivalent a day in 2013, down from an earlier 75,000-barrel-a-day target.
“Those are the two key events that cut production numbers for next year,” Chief Executive Officer Simon Lockett said in a phone interview, citing technical setbacks at the fields. “It’s a timing issue rather than the reservoir performance.”
Premier is counting on new oil deposits to reach a “medium-term” production target of 100,000 barrels a day. The London-based company has secured exploration assets in Kenya, Iraq and the Falkland Islands, and expects cash flow to reach $2.5 billion in 2016 when the U.K. Catcher field comes on stream, up from $1 billion next year.
The company raised production to 62,400 barrels a day in November from an average 57,300 barrels a day in the first 10 months of the year, it said. Full-year output will average 58,000 barrels a day, according to estimates from Oswald Clint, an analyst at Sanford C. Bernstein & Co. in London.
As production expands, net income will climb to more than $30 a barrel in the “longer term” from $11.60 a barrel last year, Clint wrote in an e-mailed report. “Premier is unduly cheap as a multiple of future earnings,” he said.
Premier fell 0.9 percent to close at 331 pence in London trading. The shares have dropped 8 percent since Nov. 6 when the company said it plugged and abandoned the Spaniards East well in the U.K. after failing to find oil or gas.