Premier Oil's Production Jumps 43%

LONDON -- Premier Oil  (LSE: PMO  ) reported today on an excellent 2012, and looks set to repeat the trick in 2013.

Overall, production levels rose from 40,000 barrels of oil equivalent a day to 57,700, a gain of 43%. There were modest increases in the U.K. and Indonesia, but Vietnam was the real star, with production jumping from 2,900 barrels to 15,200.

Two major new projects, Huntington and Rochelle, are due to come on line in the next few months. With this planned expansion, Premier is forecasting 2013 production levels of 65,000-70,000 barrels a day.

Looking slightly further ahead, three more projects -- one in Vietnam and two in Indonesia -- are due to begin producing in 2014. With the Catcher project in the North Sea also progressing, Premier could see production rise to around 100,000 barrels a day before too long.

Exploration aplenty
Premier is also targeting the end of 2017 as the date for first oil from the Falkland Islands. It recently acquired a 60% stake in the huge Sea Lion discovery made by Rockhopper Exploration, paying $230 million for the privilege. Of course, with the sovereignty of the islands in dispute, this story has a long way to go.

Premier expects to drill 14 exploration wells during 2013, with the Matang-1 well in Indonesia already under way. In total, these wells will cost $200 million.

Dividend on the way
Premier is also planning to spend a further $900 million on development wells, and already has $1.1 billion in net debt. Despite this, it is planning to pay a maiden dividend when it announced its full-year results at the end of March. Analysts are expecting the payout to be 0.4 pence, which would mean a very modest cash outlay of just £2 million.

One bit of bad news tucked near the end of today's statement was a $160 million of exploration write-offs, but details of how this figure breaks down were not provided. The shares were little changed in early trading, at 370 pence.

Premier Oil's share price is up fivefold over the last 10 years, demonstrating the outsized gains that can be made from the picking the right share in this sector. The Fool has a free guide explaining how you can analyze oil shares, and highlighting two companies we think are well placed right now. Click here to get your free report.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2202635, ~/Articles/ArticleHandler.aspx, 9/25/2016 10:31:54 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 11:40 AM
PMO $65.25 Down -0.25 -0.38%
Premier Oil CAPS Rating: No stars