Analyst James Carmichael expects Premier will complete its vital refinancing deal, marking a key turning point for investors to focus on the company’s growth and debt reduction - and that ought to provide opportunities for share price catalysts.
“The portfolio provides flexibility to outperform our forecasts and we see potential for a share price re-rating as rising production and falling opex are reflected in improved cash flows. We also flag near-term exploration upside,” Carmichel said.
He cautioned, however, that Premier Oil remains highly geared and therefore the share price remains sensitive to further oil price weakness.
Peel Hunt’s valuation (discounted cash flow) of Premier Oil’s portfolio yields a core net asset value of £481m, equating to 78p per share, and it ascribes 13p per share for exploration assets.