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Premier Oil PLC

Premier Oil plc generating significant free cash flow

Premier Oil (LON: PMO) has provided a Trading and Operations Update for the 10 months to 31st October 2019.

Highlights

· Group production averaged 79.4 kboepd for the period with high operating efficiency of 94%; forecast full year production at upper end of 75-80 kboepd guidance

· Catcher Area rates of 69 kboepd (gross) and very high operating efficiency of almost 100% maintained; project cash payback reached, 22 months after first oil

· Near field projects on track: BIG-P (Indonesia) on track for first gas by year-end; formal approval of Catcher Area satellites received with first oil targeted for early 2021

· Tolmount, Premier’s next UK growth project, on schedule for first gas by the end of 2020 adding a net 20-25 kboepd to Group production once on plateau

· Significant commercial discovery at Tolmount East (UK); development planning already well advanced with project sanction targeted for 2020 2H

· Rig contracted to appraise the Malguk-1 discovery (Alaska North Slope); targeting more than 1 bn bbls (gross) of STOIIP, expected spud February 2020

· Significant industry interest in Premier’s Block 7 Zama (Mexico) sales process; bid deadline extended into December to accommodate levels of interest

· Forecast 2019 opex (ex-lease costs) unchanged at $12/boe; full year capex guidance reduced to between $300m and $320m from $340m

· Net debt reduced by $300m to $2.03bn as at 31 October; underpinning full year net debt reduction guidance in excess of $300m

Tony Durrant, Premier Oil plc Chief Executive, commented:

“We continue to deliver on our strategic priorities. We are generating significant free cash flow, which is materially deleveraging our balance sheet. At the same time, we are actively managing our portfolio and selectively progressing growth projects at the right exposure. We also continue to create value through the drill bit and to build material new positions in emerging exploration plays at low cost.”