Premier Oil PLC (LON: PMO) have seen their shares climb on Thursday after they updates shareholders on production expectations for the year.
Premier Oil reported a rise in year-to-date production and forecasted production to be at the upper end of prior guidance.
Shares in the FTSE250 (INDEXFTSE: MCX) listed firm climbed 2.68% to 89p on Thursday. 14/11/19 11:27BST.
Average production was 79,400 barrels of oil equivalent per day for the 10 months to October end, up from 77,700 barrels in the comparative year ago period, underpinned by continued high operating efficiency of 94%.
Premier also added that October production averaged 78,400, an impressive statistic which would have caught shareholder’s eyes.
Premier expects 2019 production to be at the upper end of its 75,000 barrel to 80,000 barrel of oil equivalent guidance range.
Firms in the industry have struggled recently, with global titans such as Shell (LON: RDSB) and Total SA (LON: TTA) reporting lower profits due to slumping oil prices.
However, Premier do not seem to be phased by the market volatility and have reported strong revenue gains to back up a relatively successful period of trading.
Whilst competitors such as Tullow Oil (LON: TLW) cut their annual guidance yesterday, the update provided by Premier was a direct contrast.
Chief executive Tony Durrant commented on the results, “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.”
David Barclay, senior investment manager at Brewin Dolphin, said: “Premier Oil’s production levels have dipped slightly compared to the half-year average reported in the summer, dropping from 84,100 barrels of oil per day to 79,400.
“Despite this, the full year production estimate of 75,000-80,000 barrels of oil per day remains unchanged. Premier’s Catcher Area holds its place as the cream of the crop with strong output levels reported from this field once again.
“A fast-track development project is well underway to support the recent discovery of gas at Tolmount East and this is expected to have a further impact on production, once drilling starts in mid-2020.
“Overall debt levels remain high, but the company has reported a $300m reduction, which is deemed to be in line with guidance.
“What’s yet to be seen is the impact of the sale of its Zama oil field, which now has an extended bid deadline to December.”
